Indonesia tests options for own car brand

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The Kiat Esemka is using a locally produced 1,500 cc engine, which has, however, not passed emission tests yet.

Indonesia is taking steps to build its own national car under the brand “Kiat Esemka”. Prototypes have been developed by engineering students at a workshop in Surakarta, Central Java, and are currently undergoing several tests to determine if a mass production is feasible.

$1.3 million from state funds have already been used to create a small SUV and pick-up truck variants. The design is a mix of Korean and Japanese cars, the main body components come from China and the 1,500 cc engine is a student development.

The target so far is to produce 1,000 engines by the end of this year and to see if the car brand is marketable, according to the mayor of Surakarta, Joko Widodo.

Widodo said that an initial investment of around $10 million would be necessary to set up a plant with a production output of 300 cars per month.

He said that it is clear that an Indonesian car will not be able to compete on the mass market with German, Japanese and Korean cars, but could very well capture a small slice of the market if it is cleverly marketed as a homegrown product with the “Made in Indonesia” and “Developed by students” tags on it.

However, the car still needs a lot of adjustments. In May 2012, the prototype failed its first emissions test, blowing out more than double the permitted amount of CO and NOx set by the Environment Ministry .

Indonesia has already attempted to establish its own car industry earlier, and the Kiat Esemka is not the first such product.

In the Suharto era, the government launched a national car programme to follow the Malaysian government’s Proton. However, with the end of the Suharto regime and the collapse of Kia after the 1998 Asian financial crisis, the project was abandoned. The company, PT Timor Putra Nasional, was established to produce the “Timor”, a sedan based on the Kia Sephia. The Timor was meant to become the national car of Indonesia  and was sold there in the mid-1990s.

Other attempts to produce a national car were the “Bakrie”, a car brand envisaged in 1997 by the Bakrie Group conglomerate, owned by one of Indonesia’s richest families; the “Bimantara”, a car based on the Hyundai Elantra briefly built by the Bimantara Group in the 1990s; the “Marvia”, a kit car based on Suzuki SJ410 jeep; the “Maleo”, developed in 1993 by state-owned aircraft maker PT ITPN, which teamed up with UK-based Rover; the “Macan”, developed by manufacturing giant Texmaco Group with Mercedes Benz; the “Kancil”, a three-wheeler developed by PT Kancil along with Indonesian Aerospace; the “Tawon”, a mini car manufactured by PT Super Gasindo Jaya based on technology prodvided by Indian carmaker Bajaj; the “Gea”, a small city car made by state-owned train manufacturer PT Industri Kereta Api; and the off-road utility vehicle “Fin Komodo”, made by West Java-based PT Fin Tetra Indonesia, the only car whose body is made out of nationally produced steel.

Prototypes of the Gea, an Indonesian small city car prototype, are being tested by police patrols

Another car currently in development is a “national electric car” built in Jakarta, which should be ready for mass production by 2013, according to Minister for State Enterprises Dahlan Iskan, and could be sold for not more than $5,000. The electric car, named after its initiator Dasep Ahmadi, has been developed by emulating technologies already adopted in the US while sourcing specific components from abroad, particularly from China.

As a matter of national pride and also to boost local industries, the Indonesian Ministry of Industry has set up a roadmap to locally produce commercial trucks with 24 tonnes of loading capacity by 2015, hybrid mass cars by 2020 and luxury cars by 2015.

With Indonesian car sales growing from 800,000 two years ago to an estimated 940,000 this year, there seems to be a market for locally produced cheap cars in the populous nation.

Budi Darmadi, director general at the Ministry of Industry, said that the government aims to become a car production hub in ASEAN by supporting local brands in promotion, testing, and research and development. It is also looking for investors to build an automotive industry, which would require about 2 trillion rupiahs (about $200 million).

However, a national car will have a hard fight on the Indonesian automobile market which is currently dominated by Toyota, Daihatsu, Mitsubishi, Suzuki and Nissan, with Toyota alone holding 38.7 per cent of the market for passenger and commercial cars.

 

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Reading Time: 3 minutes

The Kiat Esemka is using a locally produced 1,500 cc engine, which has, however, not passed emission tests yet.

Indonesia is taking steps to build its own national car under the brand “Kiat Esemka”. Prototypes have been developed by engineering students at a workshop in Surakarta, Central Java, and are currently undergoing several tests to determine if a mass production is feasible.

Reading Time: 3 minutes

The Kiat Esemka is using a locally produced 1,500 cc engine, which has, however, not passed emission tests yet.

Indonesia is taking steps to build its own national car under the brand “Kiat Esemka”. Prototypes have been developed by engineering students at a workshop in Surakarta, Central Java, and are currently undergoing several tests to determine if a mass production is feasible.

$1.3 million from state funds have already been used to create a small SUV and pick-up truck variants. The design is a mix of Korean and Japanese cars, the main body components come from China and the 1,500 cc engine is a student development.

The target so far is to produce 1,000 engines by the end of this year and to see if the car brand is marketable, according to the mayor of Surakarta, Joko Widodo.

Widodo said that an initial investment of around $10 million would be necessary to set up a plant with a production output of 300 cars per month.

He said that it is clear that an Indonesian car will not be able to compete on the mass market with German, Japanese and Korean cars, but could very well capture a small slice of the market if it is cleverly marketed as a homegrown product with the “Made in Indonesia” and “Developed by students” tags on it.

However, the car still needs a lot of adjustments. In May 2012, the prototype failed its first emissions test, blowing out more than double the permitted amount of CO and NOx set by the Environment Ministry .

Indonesia has already attempted to establish its own car industry earlier, and the Kiat Esemka is not the first such product.

In the Suharto era, the government launched a national car programme to follow the Malaysian government’s Proton. However, with the end of the Suharto regime and the collapse of Kia after the 1998 Asian financial crisis, the project was abandoned. The company, PT Timor Putra Nasional, was established to produce the “Timor”, a sedan based on the Kia Sephia. The Timor was meant to become the national car of Indonesia  and was sold there in the mid-1990s.

Other attempts to produce a national car were the “Bakrie”, a car brand envisaged in 1997 by the Bakrie Group conglomerate, owned by one of Indonesia’s richest families; the “Bimantara”, a car based on the Hyundai Elantra briefly built by the Bimantara Group in the 1990s; the “Marvia”, a kit car based on Suzuki SJ410 jeep; the “Maleo”, developed in 1993 by state-owned aircraft maker PT ITPN, which teamed up with UK-based Rover; the “Macan”, developed by manufacturing giant Texmaco Group with Mercedes Benz; the “Kancil”, a three-wheeler developed by PT Kancil along with Indonesian Aerospace; the “Tawon”, a mini car manufactured by PT Super Gasindo Jaya based on technology prodvided by Indian carmaker Bajaj; the “Gea”, a small city car made by state-owned train manufacturer PT Industri Kereta Api; and the off-road utility vehicle “Fin Komodo”, made by West Java-based PT Fin Tetra Indonesia, the only car whose body is made out of nationally produced steel.

Prototypes of the Gea, an Indonesian small city car prototype, are being tested by police patrols

Another car currently in development is a “national electric car” built in Jakarta, which should be ready for mass production by 2013, according to Minister for State Enterprises Dahlan Iskan, and could be sold for not more than $5,000. The electric car, named after its initiator Dasep Ahmadi, has been developed by emulating technologies already adopted in the US while sourcing specific components from abroad, particularly from China.

As a matter of national pride and also to boost local industries, the Indonesian Ministry of Industry has set up a roadmap to locally produce commercial trucks with 24 tonnes of loading capacity by 2015, hybrid mass cars by 2020 and luxury cars by 2015.

With Indonesian car sales growing from 800,000 two years ago to an estimated 940,000 this year, there seems to be a market for locally produced cheap cars in the populous nation.

Budi Darmadi, director general at the Ministry of Industry, said that the government aims to become a car production hub in ASEAN by supporting local brands in promotion, testing, and research and development. It is also looking for investors to build an automotive industry, which would require about 2 trillion rupiahs (about $200 million).

However, a national car will have a hard fight on the Indonesian automobile market which is currently dominated by Toyota, Daihatsu, Mitsubishi, Suzuki and Nissan, with Toyota alone holding 38.7 per cent of the market for passenger and commercial cars.

 

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