Wed, 29 Nov 2000

Organda to purchase 20,000 Daewoo cars

JAKARTA (JP): The Association of Land Transportation Owners (Organda) signed a memorandum of understanding (MoU) on Tuesday to purchase 20,000 cars from the ailing South Korea-based Daewoo Motor Co., to replace aging taxis in the Greater Jakarta area.

Chairman of Organda's Jakarta chapter Aip Sjarifuddin said Daewoo would supply the 20,000 cars over a period of three years with the first batch of 8,000 vehicles due to arrive in the capital in February 2001.

"We will import the 1,500 cc sedans in completely knock-down form so as to reduce the price," Aip told journalists after the ceremony.

He said the Ministry of Trade and Industry had committed itself to lowering the import tax to 10 percent so that the market price of each car would be around Rp 70,000,000 (US$7,368).

"Under the MoU, Organda is required to purchase the cars and, so far, some of the taxi operators in the Greater Jakarta area have agreed to purchase them," Aip said, while citing that the largest taxi operator in the capital, the Blue Bird Group, had stated its intention of purchasing the vehicles.

Aip and the governor of Chollabuk-do province in South Korea, You Jong-keun, signed the MoU, witnessed by Minister of Industry and Trade Luhut Binsar Panjaitan and Jakarta Governor Sutiyoso at the ministry's office.

The ailing Daewoo Motor Co., once dubbed the second largest automaker in South Korea, is suffering from mounting losses resulting from a work stoppage on top of its already huge debts. It was declared bankrupt on Nov. 8.

The importation of the cars, worth US$110 million, will be undertaken by Chonbuk Trading Co.

To assemble the cars, Aip said, the company would use the assembly plant of PT KIA Timor Motor because Daewoo did not have its own factory here.

Aip explained that the city needed the cars because out of the 33,000 registered taxis, only 18,000 to 20,000 of them were allowed on the streets while the rest had failed the vehicle road test.

"Some of the ones operating are also not in good condition. With the current fare hike, we have to provide taxis which have passed the requirements so as to improve service to the public," he said. (dja)