Timor says it has no plan to cut prices of its sedans

JAKARTA (JP): PT Timor Distributor Nasional, distributor of the country's much disputed Timor car, said yesterday that the rupiah's sharp depreciation against the U.S. dollar and Kia Motor's financial problem would not affect its car prices.

Timor Distribution's president Soemitro Soerachmad said neither the sharp appreciation of the U.S. dollar against the rupiah, nor South Korean Kia's financial problems would make the company lower the price of its S-515 and S-515i models.

Soemitro denied recent rumors the company would cut the price of Timor.

The rumor was based on a recent 30 percent discount of Kia Motor's Credos, Pride and Sephia cars (which are called Timor in Indonesia).

PT Timor Distribution is the sales division of PT Timor Putra Nasional, which was granted exclusive rights last year to manufacture the so-called "national car".

The company, controlled by President Soeharto's youngest son Hutomo Mandala Putra, is allowed to import assembled Sephia -- renamed Timor -- from Kia Motors Corp of South Korea., until its manufacturing facilities are fully built.

The national car receives import duty and luxury tax exemptions, making it more than 60 percent cheaper than other cars in the domestic market.

Soemitro said that Timor had nothing to do with Kia's sales campaign last July, because about 39,000 Timor cars had been shipped to Indonesia. "So we would not need to import any more," he said.

He said Timor would also not cut its car price because Timor sold its cars at manufacturing price, while Kia's cars were sold at retail price.

The price of Timor S-515 remained at Rp 33.35 million (US$12,851) and the Timor S-515i at Rp 35.4 million, he said.

Kia launched the big discount to get fresh funds to strengthen its cash flow, he said.

The Kia Group, once South Korea's eighth largest conglomerate, was recently placed under bank protection of creditors to prevent its insolvency.

Soemitro said Timor would keep its plan to transfer manufacturing and assembling technology from Kia.

Forty-nine Timor employees are being trained at Kia Motors Corporation in South Korea, he said.

Timor Putra's president Hutomo said yesterday his company was looking into the possibility of using the technology from the Italian sports carmaker Lamborghini, in addition to Kia Motors.

Timor is currently in the process of negotiating a US$840 million loan with a bank consortium to speed up its manufacturing plant.

The government has ordered 16 local government and private banks, led by state-owned Bank Dagang Negara, to lend to the project. (das)