Government plans to revive national car program

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)