U.S. automakers question govt's ban on luxury cars
U.S. automakers question govt's ban on luxury cars
JAKARTA (JP): The United States Automotive Trade Policy
Council said on Thursday international automakers were concerned
by Indonesia's recent decision to reimpose a ban on the import of
luxury vehicles.
Stephen J. Collins, president of the council which groups
American automakers DaimlerChrysler, Ford Motor Company and
General Motors, said foreign automakers also questioned the
government's plan to revive its national car project.
He said banning the import of luxury cars and reviving the
national car project were inconsistent with the country's own
commitment to liberalize its automotive industry.
"We are going to meet with government officials to seek
clarification on why it is being inconsistent with the World
Trade Organization's rules on open markets, which Indonesia is
very aware of," he told The Jakarta Post after meeting with local
auto parts producers.
The purchasing manager for DaimlerChrysler in Southeast Asia,
Gerhard Mueller, said foreign automakers expected Indonesia to
lift its ban on luxury car imports.
"We understand that Indonesia has its national interests, but
we hope Indonesia will open its market and allow us to do good
business together," he told the Post.
Collins said the Indonesian government had won the sympathy of
the international market when it decided in mid-1999 to open its
automotive market by liberalizing car imports, eliminating import
duties for car components and abolishing the national car
project.
"But this particular decision (to ban luxury car imports) has
caused people's head to turn, because the Indonesian government
had been considered as taking all the right steps so far," he
said.
Minister of Industry and Trade Yusuf Kalla issued a decree
last month reimposing the ban on the import of luxury vehicles in
an attempt to reduce "social friction".
Ministerial Decree No. 49/2000 bans the import of automobiles
which have an engine capacity of 4,000 cc and above or a price
tag of more than US$40,000. The decree affects all vehicles which
seat fewer than 10 people.
Kalla said that despite the government's decision in July 1999
to allow the import of completely built-up cars, the government
felt it necessary to limit the import of luxury cars in order to
reduce social jealousy.
He defended the policy, saying the decree in no way violated
the World Trade Organization's open-market principles because it
did not discriminate against any specific auto brand.
According to Collins, American automakers also are concerned
by Indonesia's plan to revive the Timor national car project with
Korean automaker Kia Motors.
"We already told the Indonesian government years ago that (the
national car project) is a bad policy and that it has taken a
poor partner," he said, referring to Kia's recent bankruptcy.
The automotive trade policy council has been opposed to
Indonesia's national car program from the beginning, he said,
adding that Ford, General Motors and DaimlerChrysler canceled
plans in 1996 to invest about $1 billion in Indonesia's
automotive industry because of the program.
"We're here now to say that Indonesia has been doing the right
things ... and we want to reengage .... But try not to make any
moves that do not make sense," Collins said.
Collins was commenting on the government's recent offer to Kia
Motors to restart the car project, an invitation which was
personally delivered by President Abdurrahman Wahid during his
recent visit to South Korea.
The national car project was begun in 1996 by PT Timor Putra
National, a company owned by Hutomo Mandala Putra, the youngest
son of former president Soeharto. In order to support the
project, the government exempted Hutomo's firm from import duties
and luxury taxes for three years.
Kia, which is now owned by South Korean automotive giant
Hyundai, was the sole provider of the knock-down car units and
technology for the project before it withdrew in 1999.
The national car program eventually failed and Hutomo's
company is now saddled with around Rp 3 trillion in debt
following a sharp decline in the sale of the automobiles and a
disagreement with the government over alleged unpaid import
duties. (cst)
JAKARTA (JP): The United States Automotive Trade Policy
Council said on Thursday international automakers were concerned
by Indonesia's recent decision to reimpose a ban on the import of
luxury vehicles.
Stephen J. Collins, president of the council which groups
American automakers DaimlerChrysler, Ford Motor Company and
General Motors, said foreign automakers also questioned the
government's plan to revive its national car project.
He said banning the import of luxury cars and reviving the
national car project were inconsistent with the country's own
commitment to liberalize its automotive industry.
"We are going to meet with government officials to seek
clarification on why it is being inconsistent with the World
Trade Organization's rules on open markets, which Indonesia is
very aware of," he told The Jakarta Post after meeting with local
auto parts producers.
The purchasing manager for DaimlerChrysler in Southeast Asia,
Gerhard Mueller, said foreign automakers expected Indonesia to
lift its ban on luxury car imports.
"We understand that Indonesia has its national interests, but
we hope Indonesia will open its market and allow us to do good
business together," he told the Post.
Collins said the Indonesian government had won the sympathy of
the international market when it decided in mid-1999 to open its
automotive market by liberalizing car imports, eliminating import
duties for car components and abolishing the national car
project.
"But this particular decision (to ban luxury car imports) has
caused people's head to turn, because the Indonesian government
had been considered as taking all the right steps so far," he
said.
Minister of Industry and Trade Yusuf Kalla issued a decree
last month reimposing the ban on the import of luxury vehicles in
an attempt to reduce "social friction".
Ministerial Decree No. 49/2000 bans the import of automobiles
which have an engine capacity of 4,000 cc and above or a price
tag of more than US$40,000. The decree affects all vehicles which
seat fewer than 10 people.
Kalla said that despite the government's decision in July 1999
to allow the import of completely built-up cars, the government
felt it necessary to limit the import of luxury cars in order to
reduce social jealousy.
He defended the policy, saying the decree in no way violated
the World Trade Organization's open-market principles because it
did not discriminate against any specific auto brand.
According to Collins, American automakers also are concerned
by Indonesia's plan to revive the Timor national car project with
Korean automaker Kia Motors.
"We already told the Indonesian government years ago that (the
national car project) is a bad policy and that it has taken a
poor partner," he said, referring to Kia's recent bankruptcy.
The automotive trade policy council has been opposed to
Indonesia's national car program from the beginning, he said,
adding that Ford, General Motors and DaimlerChrysler canceled
plans in 1996 to invest about $1 billion in Indonesia's
automotive industry because of the program.
"We're here now to say that Indonesia has been doing the right
things ... and we want to reengage .... But try not to make any
moves that do not make sense," Collins said.
Collins was commenting on the government's recent offer to Kia
Motors to restart the car project, an invitation which was
personally delivered by President Abdurrahman Wahid during his
recent visit to South Korea.
The national car project was begun in 1996 by PT Timor Putra
National, a company owned by Hutomo Mandala Putra, the youngest
son of former president Soeharto. In order to support the
project, the government exempted Hutomo's firm from import duties
and luxury taxes for three years.
Kia, which is now owned by South Korean automotive giant
Hyundai, was the sole provider of the knock-down car units and
technology for the project before it withdrew in 1999.
The national car program eventually failed and Hutomo's
company is now saddled with around Rp 3 trillion in debt
following a sharp decline in the sale of the automobiles and a
disagreement with the government over alleged unpaid import
duties. (cst)