Sales of Timor national car plunged in February
By Clay Lucas
SALES of the Timor Putra national car collapsed last month.
The company had expected to sell more than 3,000 cars in February but, according to statistics released by PT Astra International, sold only 962.
This was down from 3,259 in January.
There was a 22 percent drop in total vehicle sales for the month, down to 24,281 from January's encouraging 31,522.
But February included the Moslem fasting month of Ramadhan, when most companies experienced a severe downturn in business.
Despite the plunge, the Timor car continues to fare better than its rivals in passenger cars, leading Honda, which sold 873.
The Timor car alone benefits from duty and tax breaks granted by the government under the national car policy.
The company said last week it had promoted the cars throughout the country with incentives such as a 24-month spare parts and service guarantee. It expects the sales drop to be a temporary lapse.
PT Timor executives said the company continued to control more than 25 percent of the market since the launch of the Kia-built car in October last year.
Timor sedans will be manufactured by PT Timor Putra Nasional in conjunction with South Korea's Kia Motors Corp.
The company is controlled by President Soeharto's youngest son, Hutomo Mandala Putra. It imports completely built up Kia Sephia sedans because it does not yet have a manufacturing plant of its own.
The government has allowed PT Timor to import about 45,000 sedans a year from Kia Motors. The company has so far imported about 18,000.
This discriminatory treatment has angered Japan, the European Union and the United States, all of whom have filed complaints with the World Trade Organization (WTO).
These countries are negotiating with Indonesia and the issue is expected to come to a head at the next WTO meeting, scheduled for later this year.
PT Timor originally planned to assemble Timor cars in Indonesia but due to "inadequate assembly facilities" has been given a temporary exemption to allow importation from South Korea.
PT Timor Distributor Nasional president Soemitro Soerachmad said last week the company was well advanced with work on a plant in Cikampek, Bekasi, West Java, to manufacture all Timor cars.
"We want to put out at least 4,000 sedans every month from that plant," he said.
"We are committed to developing an internationally competitive automotive industry here, with the mass manufacturing facilities available in many other Southeast Asian countries."
The plant, built on 73 hectares and totaling 200,000 square metres of production floor space, will ultimately have an annual production capacity of 120,000 vehicles -- 70,000 sedans and 50,000 Sportage sports utilities.
Construction of the plant started on February 24 and is expected to be completed by September next year.
It was announced last month that the company had signed an agreement with Indomobil, the country's second largest car group, to assemble Timor sedans at its plant in Tambun, near Bekasi.
The collapse of Timor car sales in February showed it still has work to do in developing its marketing and distribution system, Soemitro said.
The company launched a special package in January which failed to attract purchasers.
Spare parts for the vehicle remained hard to find and this may have deterred many people from buying.
PT Timor claimed earlier this year that competitors had waged a "trade war" against it and had spread rumors it had a poor after-sales service.
Consumer confidence in the vehicle dipped last month when House member Ni Gusti Ayu Eka Sukmadewi reported Kia Motors had been dumping defective vehicles onto the Indonesian market.
State-owned PT Surveyor Indonesia carried out an exhaustive investigation into the claims and established that all vehicles being shipped in by Kia Motors were in showroom condition.
Kia Motors pitched in against Ni Gusti's statements. "The allegation of dumping defective vehicles is outrageous and groundless, as Korea uses left-hand drive cars while Indonesia uses right-hand drive cars," it said.