Timor cars sold to agrarian ministry

JAKARTA (JP): PT Timor Distributor Nasional (TDN), the distribution arm of PT Timor Putra Nasional, has sold 12 Timor cars to the Ministry of Agrarian Affairs.

Gurhadi Kartasasmita, a TDN executive, said over the weekend the sale of the controversial cars to the ministry was part of the company's sales promotion program.

The agrarian affairs ministry is the first government office to publicly disclose the purchase of the so-called national cars.

Gurhadi said his company has recently opened 10 sales offices in Jakarta to boost sales, in addition to two in Bandung, one in Semarang and four in Surabaya.

The company has also set up five sales offices outside Java, in Medan, Palembang, Manado, Palu and Kendari.

Gurhadi said Timor Putra Nasional had so far imported 10,520 cars from South Korea's Kia Motors. The company will receive another 1,500 cars later this month.

The Timor is sold for around Rp 35 million (US$15,000), about half the price of Japanese sedans of the same class. Kia sells the same car overseas, including in the United States, for $8,000.

Under the new car policy, introduced in February this year, producers of a "national car" are granted exemption on import duties and luxury taxes that add about 60 percent to the price of cars in the country.

Timor Putra, controlled by President Soeharto's youngest son Hutomo Mandala Putra, is the only company qualified to produce the so-called national car and to receive the tax break.

The company, which will produce the car in cooperation with Kia Motors, is allowed to import the car from Kia until the firm's own production factory becomes operational in 1998.

Japan, the United States and the European Union formally filed a complaint at the World Trade Organization last month against the Indonesian car policy. (hen)