Timor vows to stick with its manufacturing project

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)