Timor Putra needs 5 years of protection: Businessman
Timor Putra needs 5 years of protection: Businessman
JAKARTA (JP): PT Timor Putra Nasional -- the pioneer car
assembly company which has been granted import duty and luxury
sales tax exemptions needs to be protected for at least five
years, commissioner of the Udatinda Group Frits Hendrik Eman said
yesterday.
"I believe that Timor Putra will remain the only automobile
company granted the duty and tax exemptions for at least the next
four to five years to allow it to grow healthily," Eman told a
news conference.
The Udatinda Group -- which has 20 subsidiaries engaged in
tourism, transportation, banking and automobile component
manufacture -- has a 35 percent stake in PT Indauda Putra
Nasional Motor, a joint venture with Kia Motors Corp. of South
Korea.
The Humpuss Group, controlled by Hutomo (Tommy) Mandala Putra,
owns 35 percent and Kia Motors the remaining 30 percent share in
PT Indauda Putra Nasional which assembles Timor cars in Surabaya.
"PT Indauda has been assigned, for the time being, a contract
to assemble Timor cars from complete knocked-down kits imported
from Kia Motors," Eman said.
Timor Putra Nasional has been given pioneer status by the
government and is therefore exempt from import duty on car
components and the luxury tax on car sales under new regulations
enacted last month.
The new rulings, consisting of a Presidential instruction, a
government regulation and a decree by the industry and trade
minister and finance minister were enacted on Feb.19 but were
announced on Feb. 28, two days after Tommy launched the Timor
sedan prototypes.
On account of the tax exemptions Timor cars can be sold at
half the price of Japanese makes of the same class (1,600 cc
engine displacement capacity).
In a related development, the association of car assemblers
said that its members had postponed the equivalent of hundreds of
millions dollars in investment in car production, waiting for the
impact of the new automotive industrial policy.
Herman Latief, chairman of the association, said on Monday
that the car assemblers first wanted to see the developments in
the market after the launching of the Timor cars.
Astra International, the largest car company, has decided to
postpone an investment of Rp 1.2 trillion ($518 million) and
Indomobil, the second largest assembler, shelved its Rp 600
billion investment programs.
Eman rejected the fear that the existing car assembly
companies which do not enjoy the duty and tax exemptions would go
bankrupt due to the fierce competition from Timor cars.
He acknowledged that he had heard news of possible a threat by
Japanese auto makers who might retaliate against what they see as
a discriminative policy.
However, he said, it would be out of proportion for the
Japanese automobile companies, which have dominated the domestic
car market for many years, to retaliate against the new national
automotive industrial policy.
"Timor Putra will procure components for its Timor cars from
many different sources," he added. (kod/vin)