When will we produce own car?

When will we produce own car?

As a country with a big population and with a fast growth in Gross Domestic Product, Indonesia is a good market for the car industry. Since the year 1990, the volume of sales has always been big. But the market is continuously dominated by the big five, i.e. Toyota, Honda, Mitsubishi, Suzuki and Daihatsu, all from Japan.

In 1978, the government issued a regulation which required local assemblers to gradually introduce the use of locally made components. The target was that in 1982 Indonesia would manufacture cars. But in practice, appointed assemblers ignored the regulation, and in 1982 no cars were made by Indonesians.

A big investment is needed to build a car factory. On the other hand, just to assemble a car is highly profitable, whereas to import a foreign produced car is subject to 200 percent tax.

Appointed assemblers are just merchants, not industrialists. So they don't care who makes the cars. The important thing for them is how to make profit. It seems impossible to expect appointed agents to produce Indonesian cars. Instead, the government should play the role, and in this case state-owned companies (BUMN) is a good answer. Like state-owned companies Perumka (railway), aircraft producer PT Industri Pesawat Terbang Nusantara and weapon producer PINDAD, BUMN could be directed to make cars. In France, French Renault is a state company.

SIHONO

Bandung, West Java