National car program to use S. Korean parts
National car program to use S. Korean parts
JAKARTA (JP): South Korean component suppliers are in town to
offer support for Indonesia's "national car" program, but their
local partners, who have also pledged to back the program, say
they had expected vendors with more advanced technology.
A. Syafiun, chairman of the Federation of Automotive Part
Makers, said yesterday he was "disappointed" that the group of
Korean component suppliers who met with Federation members and
government officials were makers of products already manufactured
in Indonesia.
He said, however, that a second group of Korean suppliers,
arriving in the near future, would consist of producers of more
sophisticated automotive parts which Indonesian manufacturers are
still unable to make.
"Cooperation between Korean and Indonesian component suppliers
for the national car is aimed at a transfer of technology, so we
expect them to bring and transfer to us the technology we have
not yet mastered," Syafiun told reporters.
He said many of the vendors in yesterday's group were
producers of foot padding, spark plugs and other components which
Federation members already produce.
Sixteen South Korean suppliers met with Federation members and
were briefed on the "national car" program by officials from the
Ministry of Industry and the Trade and the Investment
Coordinating Board and by executives from the surveyor firm, PT
Sucofindo, and the banking industry.
The meeting sessions were closed to the press.
According to Syafiun, the component vendors were suppliers of
the Korea-based automobile company, Kia Motors Corp.
Kia Motors is a shareholder in PT Kia Timor Motor, a company
established by PT Timor Putra Nasional -- controlled by President
Soeharto's youngest son, Hutomo Mandala Putra -- to manufacture
the so-called national car.
Under the program, the government granted Timor Putra 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.
Syafiun said the technology transfer could either be done by
training, factory relocation or new investments in Indonesia.
He refused to elaborate, saying that the terms of cooperation
are still being discussed.
In the future, the Federation's members would become the
suppliers for Timor Putra's component-manufacturing and
procurement unit, PT Timor Industri Komponen, he said.
Japan, the European Commission and the United States have all
criticized the car program and accused it of violating the rules
of the World Trade Organization (WTO).
After Timor Putra launched its South Korean-made "Timor" sedan
earlier this month, Japan threatened to bring the case to the
WTO.
Chairman of the Indonesian Automotive Industry Association
Herman Z. Latif, when asked to comment on the WTO issue, said it
was a government-to-government matter. He refused to make any
further comment.
Minister of Investment Sanyoto Sastrowardoyo said last week
that his office has approved 22 foreign investors for the
automotive component industry. Apart from that, he said, another
53 South Korean investors have pledged to support the car
program.
He said the South Korean firms would not only produce parts
for the Timor sedan, but would also export their products from
Indonesia. (pwn)