Timor vows to stick with its manufacturing project

JAKARTA (JP): PT Timor Putra Nasional, a controversial car company controlled by the youngest son of former president Soeharto, will continue its plan to build an automotive industry despite the change in government.

Timor spokesman Mochamad Ircham said Monday night the resignation of Soeharto as president and ascent of former vice president B.J. Habibie would have no impact on the company's target to finish its manufacturing plant in Cikampek, West Java, by the end of this year.

"We are still sticking to the same plan of having a full manufacturing industry," Ircham told The Jakarta Post.

"The fact that Tommy (Soeharto's son Hutomo Mandala Putra) is the shareholder of PT Timor is just another reality," he said, adding that Tommy was there only to guide the company until it succeeded in building a car industry.

The Timor car project, which began in 1996, caused a controversy both domestically and internationally when it was granted import duty and luxury tax exemptions to import cars from Korea's Kia Motors Corp.

The tax incentives made the so-called national car 60 percent cheaper than other cars in the country.

However, an economic reform deal agreed with the International Monetary Fund (IMF) in January this year ended Timor's tax exemptions along with other projects granted exclusive facilities by the government.

Ircham denied that Timor's image was tarnished by the corruption, nepotism and collusion known to taint Soeharto's regime.

Soeharto quit the presidency and was succeeded by Habibie last week after overwhelming calls by students and public figures for him to step down.

"Sentiment toward our brand do not exist. Though people link it (with the current political situation), I will not join them," he said.

During four days of social unrest in the city earlier this month, angry mobs often targeted car dealerships of Timor and Bimantara, a business group owned by Soeharto's other son Bambang Trihatmodjo.

Some companies warned their employees to avoid driving or riding in either Timor or Nenggala and Cakra, the Indonesian version of Korea's Hyundai cars.

Ircham said Timor sales had dropped by about 50 percent this year. Since the company started selling the imported cars in October 1996, more than 25,000 cars have been sold and a further 14,000 cars remain in stock.

Separately, Hyundai announced last week it was planning to quit its partnership with Bimantara and seeking investors to buy its car assembly line in Indonesia.

Hyundai Motor Company produces Hyundai Accent, which is called Bimantara Cakra here, and Elantra, which is called Bimantara Nenggala, and sells them through Bimantara's PT Citra Mobil Nasional.

Hyundai and Bimantara delayed late last year a US$400 million project to build an automotive industry with the capacity to manufacture 200,000 vehicles a year, due to financial difficulties.

Neither of the top executives of PT Bimantara Cakra Nusa, the group's automotive division, were available for comment despite repeated calls by the Post Monday and yesterday.

Car analyst Suhari Sargo said Bimantara might end up becoming an authorized importer only.

"There is still hope that it can exist as a license holder to import cars but the chance of building an industry is over."

Suhari said Timor's chance of expanding its market was now remote in light of the current political situation.

"The situation is not benefiting them, their image has been tainted."

In addition, the social unrest which paralyzed the city last week has practically crippled car sales activities. The first week of this month was about the only active time for sales, he said.

Chairman of the Association of Indonesian Automotive Industries Herman Latief said less than 2,000 cars might have been sold this month. (das)