Govt not to grant incentives for Bimantara cars

JAKARTA (JP): Minister of Industry and Trade Tunky Ariwibowo has again rejected PT Bimantara Citra's request for tax and tariff incentives for its newest cars.

He reaffirmed that such tax and tariff facilities would be given to only one firm, PT Timor Putra Nasional, for the next three years. Timor Putra, controlled by President Soeharto's youngest son Hutomo Mandala Putra, is developing a national car, called Timor.

"If other companies want to [develop national cars], they are welcome to do so. But the problem for the government is that it can only afford to give such incentives to one company at a time," Tunky told journalists at his office yesterday.

Bimantara Citra, controlled by Soeharto's second son Bambang Trihatmodjo, plans to launch two sedans, with 1,500 cc and 1,600 cc engines, in July with the Indonesian names Bimantara Cakra and Bimantara Nenggala respectively.

Both cars are the Indonesian versions of the Hyundai Accent and Hyundai Elantra, developed by the Hyundai Motor Company of South Korea.

Tunky confirmed that his office had extended brand licenses to Bimantara's automotive arm, PT Bimantara Cakra Nusa, for both types of cars.

"Only brand, nothing to do with facilities," Tunky noted. "As I said, the facilities will be given to only one firm, Timor Putra, for the next three years."

Timor Putra is teaming up with Kia Motors Corp. of South Korea to develop the 1,500 cc Timor sedan.

The company said earlier that Timor cars, partly-assembled in South Korea by Kia, will start arriving in Indonesia this month. Four thousand units will be imported every month until the scheduled completion of Timor Putra's manufacturing plant in 1998.

Tunky said what makes Timor Putra different from other auto companies is that it is developing the auto technology with its own engineering and design.

The Indonesian partner, Timor Putra, will be the principal company for Timor cars. It will not be the case with Bimantara because Hyundai will remain the principal company for its Bimantara cars.

The national car program has focused international attention on the Indonesian automobile market, which has been dominated by Japanese makes for many years.

Automakers in Japan and the United States have threatened to take Indonesia to the World Trade Organization over the policy, which they believe has breached free market principles laid down by the organization.

Domestically, the policy has also sparked protests from local auto assemblers. They have complained that the policy would disrupt the local auto market as the people will adopt a wait and see strategy when buying cars.

In response to the national car program, the largest auto car assembler PT Astra International plans to produce "cheap" sedans in the near future.

"It's a good idea...as long as they do not ask for facilities," Tunky said. (rid)