Timor Putra to assemble national cars at Indomobil

JAKARTA (JP): The national car maker PT Timor Putra Nasional is planning to assemble Timor cars at Indomobil's plant from April.

Timor Putra finance director Sudjaswin E.L. said yesterday the company had signed an agreement with Indomobil, the country's second largest car assembler, to assemble Timor sedans at its plant in Tambun, near Bekasi, West Java.

"We plan to produce about 4,000 Timor sedans a month at the plant," he said after donating two Timor cars to the Palestinian ambassador to Indonesia, Ribhi Awad.

Sudjaswin refused to say how much Timor Putra would pay Indomobil.

Sudjaswin said that Timor Putra's plant in Surabaya, which was under construction, would be used to assemble Timor sporty jeeps from next year.

He said Timor Putra would start building a plant in Cikampek, Bekasi, this month to manufacture all Timor cars.

The company plans to export Timor cars to ASEAN countries from 1998.

Timor Putra, controlled by President Soeharto's youngest son Hutomo Mandala Putra, was licensed by the government last year to develop the so-called national car.

Timor cars are the only vehicles exempt from import tariffs and luxury sales taxes.

Since Timor Putra had no assembly plants, the government has allowed it to import 45,000 sedans from its South Korean partner, Kia Motors.

This discriminatory treatment has angered Japan, the European Union and the United States.

They have all filed complaints with the World Trade Organization in Geneva, where they are negotiating their complaints with Indonesia.

Timor Putra has imported 14,000 Timor sedans from South Korea.

But demand for Timor cars seems to be much lower than was estimated. Between September and December, only 5,800 Timor cars were sold, while the sales target was between 3,000 and 4,000 cars a month.

The company blamed weak sales on negative media reports and a rumor that it had poor after-sales service.

Sudjaswin said that sales had started to pick up this month and the company expected to sell 45,000 cars this year.

He said Timor Putra's competitors had staged a trade war against it by spreading rumors that Timor had poor after-sales service.

Sudjaswin said Timor Putra donated the two Timor cars to the Palestinian embassy because of the good relationship between Indonesia and Palestine.

Awad said he had no political motivation in accepting the cars and believed that Palestinian President Yasser Arafat would be happy with the donation.

"Palestinians and Indonesians are brothers. We support Indonesia's effort to develop its national car," he said. (jsk)