Soeharto launches national motorcycle
JAKARTA (JP): President Soeharto unveiled yesterday a new national motorcycle, called Expressa, and defended the controversial national car program.
Soeharto officially launched the new motorcycle, produced by a subsidiary of PT Astra International, by riding it through the grounds of the Merdeka Palace.
He hailed the small cylinder motorcycle as an "extra achievement of the nation" and named it Expressa, an Indonesian acronym for the phrase.
The new national motorcycle would help Indonesia achieve "independence" in the motorcycle industry and capture the lucrative domestic market, Soeharto said.
Indonesia must become more self-reliant in the automotive and motorcycle industries and should not only serve as a market for industrialized countries, the President said.
"We are the fourth most populated nation in the world... We should not merely become their market. We have to capture it with vehicles produced by our sons and daughters," he said after launching the motorcycle.
He said the motorcycle, designed by 12 of Astra's Indonesian engineers, was also aimed at achieving independence in motorcycle supply and transport for the lower and middle classes.
About 10.08 million motorcycles were registered in Indonesia last year and this year the number could reach 11 million, Soeharto said.
Astra chief commissioner Mohamad "Bob" Hasan said the new motorcycle would enter commercial production in May 1998 with an initial production of 30,000 motorcycles per year.
The motorcycle will cost less than Rp 3 million (US$1,000), lower than most Japanese-brand motorcycles of the same type whose prices exceed Rp 4 million.
The Expressa prototype would have a 62 percent local content in terms of value and 85 percent local content in terms of components, he said.
Indonesia is the world's third largest motorcycle market after China and India and the fifth largest producer after China, India, Taiwan and Japan.
In three years time, Indonesia is expected to become the third largest producer of motorcycles, surpassing Taiwan and Japan.
According to Astra, annual demand for motorcycles stood at 1.4 million in 1996 and this year's figure is estimated at 1.8 million.
Astra claimed it controlled 48 percent of last year's motorcycle market share, mostly from its subsidiary Federal Motor, the producer of Honda motorcycles.
Soeharto yesterday also defended the national car program as another effort to pursue independence in the automotive sector as it could not continue depending on other countries' technology.
"Our national car is a pioneer although there are still many problems. But we must go ahead and will not retreat to pursue our independence (in the automotive sector)," Soeharto said before 300 people from small businesses and cooperatives nurtured by the Dharma Bhakti Astra Foundation.
The national car program, launched in early 1996, grants tax and duty exemptions to PT Timor Putra Nasional, owned by Soeharto's youngest son Hutomo "Tommy" Mandala Putra, to produce sedans bearing the Timor brand name.
The company is required to clear an eventual goal of a local content exceeding 60 percent by 1999.
Since the company has yet to build an assembly plant, the company was licensed by the President to import up to 45,000 fully assembled Timor cars from its South Korean joint venture partner, Kia Motors Corp.
The company is set to receive US$690 million in syndicated loans from a consortium of state and private banks to build its assembly plant in West Java.
Despite the recent retrenchment program, which included the postponement of US$16.5 billion-worth of private state-related projects, the government decided to continue with the Timor project.
Japan, the European Union and the United States have taken Indonesia's national car program to the World Trade Organization (WTO)'s dispute settlement body, contending that the program was discriminatory and in violation of WTO rules.
But Soeharto argued that through the national car program, Indonesia was increasing its independence in the automotive industry and no foreign country should question it.
"There is no reason for them to object it because we simply manage our own business by building our own independence (in the automotive sector)," Soeharto said. (prb/rid)