Govt puts brakes on import of luxury cars

JAKARTA (JP): Minister of Industry and Trade Yusuf Kalla issued a decree on Friday banning the import of luxury vehicles in an attempt to reduce social friction.

Ministerial Decree No. 49/2000 bans the import of cars with an engine capacity of 4,000 cc or more, and cars with a price tag of US$40,000 and above.

Kalla said the decree was issued based on social considerations, as the import of such luxury vehicles would increase social jealousy.

"In a nation with a per capita income of only $600 to $700, some people still insist on importing cars with price tags of Rp 1 billion ($135,000)," he said during a media conference.

Kalla said he was aware of the growing presence in the country of luxury cars, which, according to him, could provide those less fortunate with yet another reason to riot.

He said despite the government's decision in July 1999 to allow the import of completely built-up cars, the government felt it necessary to limit the import of luxury cars.

He said that last December the government called on all car dealerships to stop importing luxury vehicles. "But no one would listen to us."

Tanjung Priok Police confiscated last week three Ferrari illegally moved through the customs center in Tanjung Priok, North Jakarta.

Kalla said this led him to enact a strict ban on the import of luxury cars to prevent social disturbances.

The new ministerial decree will affect all vehicles with a passenger capacity of less than 10 people.

Sports utility vehicles with engine capacities of up to 5,000 cc will be allowed to be imported into the country as long as their free-on-board prices do not exceed $40,000.

The decree also requires all owners of imported built-up cars to register their vehicles with the Directorate General of Machinery, Electronics and Miscellaneous Industries.

The vehicle owners must present a number of documents, including vehicle identification number, testing certificates from the Ministry of Communications, testing certificates from the vehicle's country of origin, a letter of guarantee from the importer of the vehicle and the vehicle's registration letter.

Kalla said the decree did not violate the World Trade Organization's principle of an open market, as it did not discriminate against any specific car brand.

"The import ban applies to any car brand and does not discriminate against particular brands." (03)