GREEN CAR INDUSTRY AWAITING GOVERNMENT POLICY

By Andi Abdussalam

Jakarta, Dec 18 (ANTARA) - With two weeks remaining before the year ends, the government is racing against time to issue a policy on the production of low-cost green cars (LCGC) in the country.          The government announced last September that it would issue this year a regulation on low-cost green cars, which are expected to be sold at 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.          "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 at the time of the announcement.          However, the industry minister said on Monday that the government regulation had not yet been issued, even though automotive industries were waiting for it. The regulation is expected to be issued within the remaining two weeks before the end of this year.            According to Minister Hidayat, the draft regulation on the production of low-cost green cars is still under deliberations before it can be endorsed into a government regulation.          In a year-end conference on Monday, MS Hidayat told the press that his ministry had met all technical and other requirements for the endorsement of the draft regulation.          He said that as the initiator of the LCGC policy, the ministry of industry had previously expected the draft regulation to have been approved before the end of this year.          The LCGC policy proposal was submitted to the ministry of finance, since it is the institution which has the right to decide on tax incentives for the production of green cars.          "Last Saturday, I met with Finance Minister Agus Martowardojo. He said that the proposal was still within time-frame, but he admitted he could not guarantee when the finance ministry would issue the policy," Hidayat said.          Hidayat said that he was told by the finance minister that the LCGC policy, which was in the form of a government regulation, was being processed and was to be sent to the President's office.          A number of automotive industries are now waiting for the LCGC production regulation that the government had promised to issue.          These automotive industries include the Astra Business Group, which produces Toyota Agya and Daihatsu Ayla cars.          Astra Daihatsu Motor (ADM) is waiting for the government regulation on green-car production. "Regarding the LCGC, we are awaiting the government regulation. We are ready to produce them," Sudirman MR, the president director of PT Astra Daihatsu told an automotive workshop in Bandung, West Java recently.          He said that his factory was now ready to produce low-cost green cars, and so he hoped the government would soon pass the regulation."We hope the draft regulation would soon be signed, because many consumers have asked about the production of the cars," noted Sudirman.          He added that apart from his factory, which was ready, suppliers too had said that they were ready for the production of LCGC cars.          Minister Hidayat said earlier that the production of LCGC was a priority program for his ministry. "LCGC is one of the industry ministry's prioritized programs. I am responsible for this regulation. I need two years to convince all sides that low-cost green car production is a global trend," Hidayat noted.          The government is planning to provide incentives for the production of this fuel-efficient car, which has an engine capacity of 1,200 cc and fuel consumption of about 20-22 kilometers per liter.          High Technology-based Industry Director General Budi Darmadi said the issuance of the LCGC policy was only a matter of time. Low-cost green cars were designed to consume non-subsidized fuels with an octane number 92 (RON92), Budi said. "The cars are designed for consuming octane 92 gasoline; so, they are expected to use non-subsidized fuels," he added.          But, Budi explained, "We cannot prohibit consumers from using other types of gasoline. It's up to them."     The director general was however optimistic that the policy would be issued this year. "We still have several days before the end of the year," he added     In September, Minister Hidayat announced plans to speed up the development of low-cost and green cars (LCGC).          Priced at not more than US$10,000 (Rp100 million) per unit, LCGC cars aim to reduce the 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.           Besides LCGC cars, the government also set a target in July to mass produce about 10,000 electric cars by 2014.           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," he said.           "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.***2*** (T.A014/ INE ) (T.A014/A/KR-BSR/F001) 18-12-2012 14:30