Timor car set to penetrate Malaysian mart

JAKARTA (JP): PT Timor Putra Nasional signed an agreement with a Malaysian car distributor yesterday to sell its Timor cars in Malaysia, with both parties hopeful that they can compete against the highly popular and locally produced Proton Wira.

Under the agreement with Triumph Rotary Sdn Bhd, Timor Putra will initially export 300 of its S515i sedans.

The Malaysian distributor hopes to order 4,200 vehicles in the first year and 6,000 vehicles in the second year of the agreement.

The agreement was signed by president of PT Timor Distributor Nasional Soemitro Soerachmad and managing director and chief executive of the Malaysian company Marvin C.S. Yong.

"We see a great opportunity for Timor in Malaysia. The decision to export was made after long consideration," Soemitro said.

He denied the suggestion that Timor's poor sales in Indonesia had forced his company to look to foreign markets.

Timor Putra Nasional, a newcomer in the Indonesian car industry, has the sole permit to build the "national car", a facility that entails it various tax breaks.

The company is controlled by President Soeharto's youngest son Hutomo "Tommy" Mandala Putra.

Currently, Timor cars are produced by KIA Motors Corps of South Korea, prompting protest from Japan, the United States and Europe.

Triumph Rotary has reportedly invested Rp 15 billion (US$5.08 million) as initial investment to develop Timor sales offices in the country, which will be opened in October. The company has more than 10 years of experience as a car distributor and has 50 outlets and 20 service centers throughout Malaysia.

Yong said he was confident of Timor's prospects because Malaysia had a big market for sedans, accounting for 80 percent of total car sales.

Timor would be priced competitively to enable it to compete against Proton Wira, the Malaysian national car.

Foreign cars in Malaysia are subject to 164 import duty and other taxes.

Yong said his company had chosen Timor Putra and not Kia "in ASEAN spirit".

PT Timor Distributor Nasional claims it has had more than 25 percent of the sedan market since October last year although sales have not been as high as expected.

With all the tax breaks, the Timor cars outpriced other sedans in the same category in Indonesia by nearly 50 percent.

The company had expected to sell more than 3,000 cars a month but sales have been much less. In February, only about 950 Timors were sold, a drop from 3,260 in January.

Soemitro said Timor Putra had sold 21,000 cars so far and blamed the government's tight monetary policy for the laggard sales. (08)