Toyota Astra asks for more incentives
Toyota Astra asks for more incentives
JAKARTA (JP): The government was urged yesterday to grant additional incentives to manufacturers of commercial vehicles in a bid to accelerate the development of the local components industry.
Rudyanto Hardjanto, president of PT Toyota-Astra Motor -- a joint venture between Toyota Motor Corp. of Japan and PT Astra International of Indonesia -- suggested that the government should reduce the luxury sales tax on commercial vehicles which bear at least local components of 60 percent.
"We get duty free facilities for our Kijang vans as Kijang's local components have exceeded 40 percent. But no additional incentives are available for us even if we increase the local content to 60 percent," Rudyanto said after witnessing the maiden export of his company's 1800-cc 7K-type engines to Taiwan and the Philippines.
Commenting on Rudyanto's suggestion, Minister of Industry and Trade Tunky Ariwibowo said yesterday that his office is ready to adjust regulations to the businesses' needs.
"We haven't closed the possibility of modifying regulations. However we need to observe the effectiveness of such regulations first and look into companies benefiting from the regulations," Tunky said after officially launching the export of the 1800-cc engines to the two countries.
Toyota Astra Motor has exported its engines for commercial vehicles since 1989 to Malaysia and Toyota's home country Japan. Up to last year, it had collected US$219.04 million from engine exports.
Rudyanto said Toyota Motor Company has decided to fully relocate the manufacture of its 1.8-liter car engine to Toyota Astra Motor.
"That means that Toyota Motor Company and other Toyota subsidiaries or affiliates around the world will procure 1,8- liter Toyota car engines from our plant," Rudyanto noted.
Meanwhile, Toyota Motor Company announced in Tokyo yesterday that it would begin importing 1.8-liter engines from Indonesia later this year.
"It will be the first time Toyota will buy a major component for its domestic manufacture from its overseas ventures," a Toyota executive said in Tokyo.
Toyota Astra plans to book Rp 99 billion (US$42.4 million) in revenues from engine exports alone this year and Rp 150 billion next year.
Rudyanto said that his company has planed to increase the local content of its Kijang vans, the best selling vehicle in the country, to 60 percent from almost 50 percent at present.
Under the government's 1993 automotive deregulation measures, commercial vehicles which have reached 40 percent local content are granted import tariff breaks for the remaining components and a luxury tax cut from 35 percent to 20 percent.
Sedans have to reach a local content of at least 60 percent, to get such incentives.
The government abruptly changed the 1993 policy in February by granting a new company, PT Timor Putra National, controlled by President Soeharto's youngest son Hutomo Mandala Putra, tariff and tax exemptions to develop what the government calls a national car, with a local content of up to 60 percent within three years.
The government also has decided that Timor Putra will be the only company granted such tariff and tax breaks for the next three years.
Effect
Rudyanto said the government's newest automotive policy has affected his company accordingly. The company has cut its vehicle production by 30 percent due to the declining demand.
Last year, Toyota Astra Motor sold 97,892 vehicles, or 25.26 percent of the total national vehicle sales of 387,541 units.
However, Rudyanto noted that the new policy is not the only reason for the current slump in automotive demand. The recent heavy floods in the city and the government's tight fiscal policies are also responsible for the declining demand.
"We are adjusting ourselves (to the new policy) and trying to further develop our business," Rudyanto said.
He noted that Toyota is still committed to increasing its investment here, especially for the commercial vehicles.
Meanwhile, State Minister for National Development Planning Ginandjar Kartasasmita expressed his belief yesterday that the latest automobile policy, which has been criticized as discriminative by Japanese car makers, would not change Japan's foreign aid policy towards Indonesia.
"I'm convinced the issue will not affect Japan's aid to Indonesia. I recently met with a visiting Japanese aid delegation but it did not give any indication that the issue would affect development cooperation between the two countries," Ginandjar was quoted by Antara as saying.
Japanese Ambassador to Indonesia Taizo Watanabe said recently that Japan objected not to the Indonesian national car policy but to the manner of its implementation which he saw as lacking in transparency, equity and fairness. (rid)