Govt undecided on national car policy for jeeps

JAKARTA (JP): The government has not decided whether to apply the national car policy to automobiles other than sedans but sole national car licensee PT Timor Putra Nasional already has its Sportage jeeps on display, for launching later this year.

The Ministry of Industry and Trade's Director General of Metals, Machinery and Chemicals Effendi Soedarsono said over the weekend that, according to Presidential Instruction No. 2/1996, the national car policy applied to sedans only.

He said the government "has not considered" whether it would give the same tax facilities to other types of automobiles, including jeeps.

"We must refer to the presidential instruction if we want to give the facilities to automobiles of other categories," Effendi said after opening a week-long automotive exhibition at the Jakarta Convention Center.

During the exhibition, a 2000cc PT Timor Sportage jeep was on display but had no price tag.

"It will be on sale at the end of the year," a sales assistant said.

PT Timor, controlled by President Soeharto's youngest son Hutomo Mandala Putra, was licensed last year by the government to develop so-called national cars.

The sedans were to be developed by PT Kia Timor Motor, a joint venture between PT Timor and its foreign partner, Kia Motors Corp. of South Korea.

Under the program, the government granted PT Timor the sole right to produce Kia's Sephia sedans -- locally called Timor -- with the help of a series of tax breaks, provided that the car's local component content reaches 20 percent by the end of the first year, 40 percent by the end of the second year and 60 percent by the end of the third year.

Since PT Timor had no assembly plants, the government later allowed it to import 45,000 completely built-up sedans from Kia Motors for its first year of production.

In a recent development, PT Timor managed to persuade giant car assembler PT Indomobil into assembling its sedans at the latter's plant in Tambun, near Bekasi, West Java.

According to PT Timor executives, 4,000 Timor sedans would be assembled every month at Indomobil's plant.

The executives said PT Timor began building its own sedan- manufacturing plant in Cikampek, Bekasi, earlier this month.

Another plant in Surabaya is being constructed to assemble Sportage jeeps, starting next year. The jeeps are originally branded as Kia Sport in their native country.

Effendi said the government has never given national car facilities for automobiles other than sedans.

"If (PT Timor) only wants to display it, they may," he said. (pwn)