GOVT HOPES TO ACCELERATE PRODUCTION OF GREEN CARS

By Andi Abdussalam

Jakarta, Sept 20 (ANTARA) - After setting a target in July this year to begin mass production of about 10,000 electric cars by 2014, the government has announced its plans to speed up the development of low-cost and green cars (LCGC).          "We are now waiting for the President to issue a presidential decree. We expect that it will soon be issued in the coming few days," Industry Minister MS Hidayat said.          With a price of not more than US$10,000 (Rp100 million) per unit, LCGC cars will be produced in an effort to reduce fuel oil subsidies provided for conventional vehicles, which burden the state budget.          "Therefore, the government is planning to accelerate the development of green car projects," Hidayat said during the launch of Toyota Agya and Daihatsu Ayla cars on Wednesday.          "The marketing strategies of Toyota and Daihatsu for the Indonesian market are in line with the government's commitment to developing LCGC cars," he added.         Earlier, President Yudhoyono also expressed concern over the fuel subsidy burden and called for stepping up efforts to develop green cars.          "We want to move faster and accelerate what we can accelerate," he told a limited cabinet meeting that discussed the development of environmentally friendly cars at the Presidential office on Wednesday.          "The rising consumption of subsidized gasoline has burdened the national budget and rendered the subsidy ineffective," the President said.          In the 2012 revised state budget, fuel oil subsidies were set at 40 million kilolitres (worth Rp137.5 trillion). Every increase of 1 million kilolitres will raise the budget by Rp3 trillion. Thus, an additional subsidy of 4 million kilolitres of fuel would cost the state Rp12 trillion.          The head of state expressed hope that green cars would help reduce demand for gasoline so the funds for subsidising fuel could be used instead for the welfare of the poor.          He pointed out that green cars could also help reduce air pollution, especially the levels of carbon dioxide in the atmosphere.          Therefore, Industry Ministry MS Hidayat said President Yudhoyono would soon issue a decree on the development of green or environmentally friendly cars later this year.          "Hopefully, it will be issued in a month," he said after attending the limited cabinet meeting on green car development at the Presidential office.     According to Hidayat, the decree will outline instructions relating to research and development of green cars.          "Various stakeholders, including the government, higher-learning institutes, national economic committee and industries, are in the process of preparing a draft of the decree," he stated.          President Yudhoyono said at the recent APEC meeting in Russia that he had spoken with South Korean President Lee Myung Bak about cooperation in manufacturing electric cars.          "When I met with Lee Myung Bak during the APEC forum in Ldivostok, Russia, I discussed the possibility of Indonesia and South Korea cooperating in the production of electric cars. President Lee hailed it," he added.          Commenting on the proposed plan to cooperate with South Korea in developing green cars, Hidayat said the industry ministry was still examining the plan.          "We have yet to decide it. We are still studying whether the cooperation with Korea will be business-to-business. If so, then who will represent Korea?" he added.         "Besides that, we also need to cooperate with Japan in developing our car component industry. After all, Toyota and Daihatzu launched Agya and Ayla cars, respectively, in which a lot of local components have been used," Hidayat pointed out.          "The localisation of Toyota Agya and Daihatsu Ayla cars has reached 84 percent. This is an encouraging achievement. Toyota and Daihatzu are expected to ask their sub-contractors in Japan to only invest in components which cannot be produced in Indonesia," he said.          Therefore, the industry minister expressed hope that Japanese car component producers could expand their business in Indonesia so more local components would be available for LCGC production.          "We hope that the automotive car component industry will develop here in line with the green car programme, so the components that are still being imported can be produced at home," Hidayat said during a hearing of the House of Representatives (DPR) Commission VI on trade and industry affairs.          "The development of a local components industry will help in the production of indigenous LCGC components," he noted.          "Sole agents should provide better opportunities for the component industry so it can help speed up automobile production in the country," Hidayat stated.          "The rising sales of motor vehicles - both two- and four-wheelers - indicate good prospects for this industry in the country," he added.          According to Budi Darmadi, the Industry Ministry's director general for high-technology priority industries, the government wants to develop the car component industry in order to boost its annual car sales to about 1 million units by 2014.          Four-wheel vehicle sales in 2011 stood at 890,000 units, while the corresponding figure for two-wheel vehicles was 8,000,000 units.          "Reinforcing the structure of the country's car component industry will be carried out in both the upstream and downstream sectors in order to reduce the importation of a number of components. We will develop a technology system so these important components can be produced at home and the assembly industry's expenses can be reduced," Budi said.    (T.A014/A/KR-BSR/F001) 20-09-2012 14:35: