Government plans to revive national car program

JAKARTA (JP): The government said on Monday that it was determined to revive the now defunct and much criticized national car program, which in the past was infested with nepotism and collusion.

Minister of Trade and Industry Rahardi Ramelan said a measure regarding the development of locally produced vehicles would be incorporated in the automotive policy currently being drafted by the government.

"We are looking at several companies which have already developed their own automobile brands," Rahardi told reporters after a seminar on the automotive industry.

The companies being considered for the program include PT Timor Putra Nasional, which in the past received harsh criticism for the favorable treatment it received from the government.

Until early 1998, Timor was the sole recipient of tax incentives to import the Timor "national" car from South Korea. These tax incentives meant Timor's production costs were 60 percent lower than its competitors.

Favoritism toward Timor, which was controlled by then president Soeharto's son Hutomo Mandala Putra, led the World Trade Organization to force Indonesia to discard its automotive policy, which gave tax incentives on the basis of the local content of automobiles.

Rahardi also said that PT Pakarya Industri, a holding company for 10 strategic industries formerly under the now-dissolved Management Board of Strategic Industries, was being looked at for the national car program. The board was chaired by President B.J. Habibie when he was the state minister of research and technology.

In cooperation with Australia's Millard Design and Orbital Engine Company, the company developed the Maleo sedan.

Before the sweeping economic crisis hit in mid-1997, it was anticipated that the Maleo would become Indonesia's second "national car" after the Timor sedan.

Rahardi also mentioned Bakrie Group's PT Bakrie Motor, which launched the prototype of its multipurpose van in 1997, as a possibility for the program.

Another possibility, according to Rahardi, was PT Texmaco Perkasa Engineering of the integrated textile producer Texmaco Group, which plans to launch its Perkasa truck in February.

State-owned fertilizer producer, PT Pupuk Kaltim, which has manufactured heavy-duty trucks, would be Texmaco's partner in the program.

Rahardi said that he would meet with the five companies for further discussions about the national car program before making any decisions.

He added that he did not know yet if the companies would receive fiscal incentives as Timor did. (das)