Soeharto launches national motorcycle

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)