Import of Proton cars not to hurt automotive industry

JAKARTA (JP): The planned import of 2,500 Proton Wira and Iswara cars from Malaysia, which will be exempted from value added tax and duties, will not affect the domestic automotive industry, an executive says.

"The Malaysian cars will account only for 1.3 percent of Indonesia's total sales, estimated at 280,000 units this year," the vice chairman on commerce of the Indonesian Automotive Industry Association, Poeng W. I. Lubis, said here yesterday.

Furthermore, the Malaysian cars will be operated as taxicabs, he said.

Imports of car components are subject to a 100 percent duty and a 10 percent value added tax, while the sales of cars are subject to a 35 percent luxury tax. For comparison, imports of assembled cars whose type is not assembled in Indonesia are subject to a 200 percent duty and a 100 percent surcharge.

Like other taxicabs, the importation of assembled Proton cars will not be subject to tax and duties.

Lubis said the import of Proton cars would affect the domestic industry if they were not operated as taxicabs.

Last week, Malaysia and Indonesia signed counter-trade deals, involving aircraft and cars, worth around US$100 million. The deals comprised of a memorandum of understanding and four letters of intent.

The MOU

Under the memorandum of understanding, the Bandung-based PT Industri Pesawat Terbang Nusantara (IPTN) will export six CN-235 transport planes worth $100 million. In return, Indonesia will buy 20 MD-3 light trainer planes valued at $2.6 million and 2,500 cars, all produced in Malaysia. One of the letters of intent specifically required that PT Citra Lamtorogung Persada buy the 2,500 cars from the Malaysian company Perusahaan Otomobil Nasional Bhd. (Proton).

An official said last week that 1,000 of the cars will be operated as taxicabs and the other 1,500 will be for official use. The car deliveries will start in September and will be completed a year from then.

In Malaysia, the showroom price of an Iswara Saga car with a 1.3 liter engine and manual transmission is M$32,000 (US$11,850.) The Wira car, with a 1.6 liter engine and automatic transmission is M$56,000.

Proton cars are produced in Malaysia in cooperation with Mitsubishi of Japan. In Indonesia, Mitsubishi vehicles are assembled by the Krama Yudha Group.(icn)