Indonesian car plans close to completion

Indonesian car plans close to completion

Development of an Indonesian national car could get the go-
ahead within weeks according to sources in Australia.

Although the plans for the Maleo remain unconfirmed, industry
sources suggest the Indonesian government has been hosting key
Australian component suppliers and showing them several potential
factory sites around Jakarta.

One delegation included senior officials from the Orbital
Engine Company, the Perth based two stroke technology experts.
The delegation visited several engineering facilities to assess
the capacity and capability of local component makers.

These visits indicate the project has received official
sanction, and its financing, up to now the greatest threat to its
viability, has been assured.

It is also unclear who will make decisions regarding the
actual content of the vehicle in terms of specific components and
features.

The Australian visits to Indonesia follow a high-level
Indonesian technical delegation, comprising engineers and
production specialists, which toured suppliers and an engineering
center in Australia last month.

Sources said contracts with relevant companies are likely to
be signed within weeks and an official announcement of the
project is expected towards the end of next month.

The Maleo is expected to be engineered in Melbourne and could
use a state of the art mechanical package, as well as tap into
Australia's growing high technology automobile component
industry.

The Indonesian side of the project is also shrouded in
secrecy, but the announcement of the plan is expected to involve
the Minister for Science and Technology, B.J. Habibie, and Hutomo
Mandala Putra's Humpuss group.

Dubbed the "Habibie Volkswagen" in some industry circles, the
Maleo is aimed at putting Indonesia on wheels in a similar manner
to Malaysia's success with the Proton.

The Humpuss Group is said to be working on a deal with Korean
car maker Kia on a project called "Timor".

Government and car industry sources say Habibie has signed
contracts with Australian firms to develop the car. These are
said to be worth between $95 million and $120 million.

The Maleo will be low cost, about the size of a Toyota
Corolla, have a small engine and is intended for export as well
as domestic sales. The name Maleo comes from a small indigenous
Indonesian bird.

Production will initially peak at only 30,000 units annually,
though the plan allows for escalation to 100,000 units a year.

The design is yet to be signed off, so the production date of
late 1998 seems doubtful at present. However, if existing
off-the-shelf technology is adopted the development period could
be considerably shortened.

The most likely location for the Maleo factory is thought to
be Cikampek, outside of Jakarta.

Sources in Australia have suggested the project aims for 60
percent local content eventually, with the remaining parts coming
from Australia. However, this will require a significant
investment by component makers in Indonesian facilities before
anywhere close to this level of local content could be attained.

Industry sources say bigger suppliers such as those involved
in fuel, electronics and other components could be close to
deciding on establishing Indonesian-based off-shoots in order to
supply the Maleo project.

Initially, Indonesia looked to Rover Cars of Britain for help.
Apparently Rover was later rebuffed after misunderstandings
developed regarding control of the project.

The success of the Maleo project could lead to other design
and component export orders for Australia from other Southeast
Asian countries eager to gain independence from Japanese and
European automotive technology and designs.

Another Malaysian car could be the first of many such orders,
according to one industry source.

Habibie is known to savor making bold technological strides,
such as his creation of the Indonesian aircraft industry.