Fri, 06 Jun 1997

PT Bimantara, Hyundai to set up automotive plant

JAKARTA (JP): PT Bimantara Cakra Nusa of Indonesia and Hyundai Motor Company of South Korea have formed a joint venture to set up an automotive manufacturing plant in Purwakarta, West Java, to produce Bimantara cars.

Chairman of the Bimantara Group, Bambang Trihatmodjo, and chairman of Hyundai Motor Co., Mong Gyu Chung, signed a joint- venture agreement here yesterday.

"As I said before, although we were not given national car status (to benefit from duty and tax breaks) from the government, we will proceed with our plans," Bambang said.

The venture, called PT Bimantara Hyundai Indonesia, is 50 percent controlled by Hyundai Motor Co. and 25 percent each by Bimantara Cakra Nusa and PT Asriland.

Bambang Trihatmodjo, President Soeharto's second son, has a stake in Asriland, but how big a stake is not immediately clear. Asriland is developing the 500-hectare Bimantara Automotive Industrial Estate in Purwakarta

Bimantara Hyundai Indonesia president Jongkie D. Sugiarto said the initial paid-up capital for the joint venture was $150 million.

He said investment in the plant was estimated at $400 million. The joint venture is to produce sedan cars and commercial vehicles.

Jongkie said the plant would have an initial production capacity of 100,000 vehicles a year, with working two shifts.

Construction will start soon and be completed by the end of next year. And by January 1999, the plant would start producing vehicles with local content of more than 60 percent, Jongkie said.

The auto complex will have assembling, body stamping and machining facilities.

Jongkie explained that if machining was carried out locally the car would be credited with having a 25 percent local content, body stamping would add another 20 percent, and assembling 5 percent.

"We will buy the remaining 10 percent to 15 percent from local vendors to achieve a 60 percent local content in our vehicles," Jongkie said.

He said the Bimantara Cakra sedan -- a renamed Hyundai Accent imported from Hyundai Motor Co. in complete knocked down form and assembled locally -- was 20.64 percent made with local components.

And the Bimantara Nenggala sedan -- a renamed Hyundai Elantra -- had a 20.79 percent local content, he added.

As Cakra and Nenggala sedans contain more than 20 percent local components, the tariffs on the remaining imported components are dropped to 50 percent, down from 65 percent.

On top of import tariffs, the cars are also subject to a 35 percent luxury sales tax and 10 percent value added tax.

When Bimantara can produce vehicles with a 60 percent local content it can sell them at very low prices as the remaining imported components will be exempted from import duty and luxury tax. (rid)

Timor -- Page 12