Govt directive on buying Timors unfair: Bimantara

JAKARTA (JP): The government's directive that all government institutions, state and local government companies must buy Timor cars is an unfair policy, the president of conglomerate PT Bimantara Citra, Bambang Trihatmodjo, said here yesterday.

Bambang said the government should not favor one particular make but should give equal opportunity to all local car manufacturers.

"We hope the government will be more efficient. So, when it buys cars, it buys the best in term of price and quality ... there are many choices," Bambang, the second son of President Soeharto, said after signing an agreement with Hyundai Motor Co of South Korea to form a joint-venture company to produce Bimantara cars in Indonesia.

State Minister of National Development Planning Ginandjar Kartasasmita confirmed Wednesday that the government had ordered all government institutions, state and local government firms to buy only national cars produced by PT Timor Putra Nasional, headed by President Soeharto's youngest son Hutomo Mandala Putra.

"We have instructed all government institutions to buy national cars this year if they need sedans for offcial use (not commercial vehicles)," Ginandjar said.

But Bambang said he would not protest against the decision, saying it would be futile.

Instead he vowed that his Bimantara cars would continue to compete head to head with Timor sedans to capture the growing sedan market.

"Although Timor gets tax and import duty exemptions and we don't, we are determined to compete against them," Bambang said yesterday.

Earlier this week, PT Citramobil Nasional, which produces Bimantara sedans, slashed its car prices by six percent in a bid to improve sales from 600 cars a month to 700 cars.

Citramobil said the 1,600-cc Bimantara Nenggala sedan -- a renamed Hyundai Elantra -- now sells for Rp 56 million (US$22,990) with on-road costs, down from Rp 59.5 million.

Down

And the 1,500-cc Cakra sedan -- a renamed Hyundai Accent -- now sells for Rp 42.5 million on road, down from Rp 45 million.

Cakra's new price is only slightly higher than the 1,500-cc Timor sedan, whose price ranges from Rp 35.75 million to Rp 39.5 million on road.

Under the government's national car policy, Timor sedans, imported fully assembled from South Korea's Kia Motors Corp, are exempt from the import duty and luxury tax which adds some 60 percent to car prices in Indonesia.

The policy prompted Japan and the European Union to ask the World Trade Organization to form a panel to evaluate the policy which they say breaches international trade rules.

Soemitro Soerachmad, president of PT Timor Distributor Nasional, the sole distributor of Timor cars, said yesterday his company welcomed competition.

Normal

He also said the government's decision to favor Timor sedans in its purchasing policy was normal as it should support the national car program.

He said the government had taken a similar measure in the past by buying locally-assembled commercial vehicles for official use.

"There is nothing wrong with this. The national car program is the government's program, so the government is obliged to make it succeed," Soemitro said.

He said Timor sales to state agencies and companies would represent less than 10 percent of its total sales.

"We will still rely on the general public to buy Timor cars because without their support, we believe the national car program will fail," Soemitro said at his office.

He said Indonesians should learn from Malaysia's national car program, the Proton, which had full support from the Malaysian government and people.

Soemitro said Timor Distributor had been offering Timor cars to civil servants at departments and state agencies as well as employees of state firms.

"We have received fleet orders for more than 1,000 Timor sedans from civil servants at the ministries of industry and trade, cooperatives and small enterprises, tourism, post and telecommunications, transportation, justice and from the National Land Agency", he said.

Timor also has received fleet orders from state-owned oil and gas firm PT Pertamina and its contractors, state-owned domestic telecommunications company PT Telkom and other state firms.

"We don't offer them discount prices. But we offer them credit financing facilities to enable them to pay Timor sedans by installments," Soemitro said.

PT Timor Distributor has formed a leasing company, PT Primadana Putra Finance, to support the sales of Timor sedans. It also cooperates with non-bank financial institutions to back up Timor sales financing. (rid)