JAKARTA: Car prices in the domestic market have been relatively stable despite the rise of global steel prices and crude oil prices in the last few months.This was made possible because car assemblers and importers here have been optimally using the zero percent tariff facility under the Asean Free Trade Agreement and the Indonesia-Japan trade agreement.Chairman of Indonesian Automotive Industry Association (Gaikindo) Sudirman M. Rusdi said that the facility has been effective to restrain car prices, mainly the completely built up (CBU) ones, although supply has slowed down on Japans massive earthquake and tsunami.Certainly the reduction of import duty is very effective in stabilizing car prices in the domestic market because the implementation of IJEPA and AFTA lower car import duty, mainly CBU, to be as low as 0%, which makes selling prices become more competitive, he told Bisnis yesterday.Sudirman, who is also President Director of PT Astra Daihatsu Motor, admitted that the company has benefited from the import duty facility for delivering some CBU models from Malaysia and Thailand after the Asean free trade agreement became effective.As a result, selling prices of cars at home are relatively stable despite increases in global steel and crude oil prices, which usually influenced the production cost in the automotive industry.Daihatsus CBU cars are not many because we already have assembling plants here so imports are done only for some main components. This was the biggest contribution in the reason why prices in the domestic market could be stable.Completely knocked-down car importsPT Hyundai Mobil Indonesia has been importing most cars in the form of completely knocked down (CKD) and CBU units so the company has not used the import duty facility, said President Director Jongkie D. SugiartoFor example, the CBU models imported from South Korea are imposed with tariffs of up to 45% because we have not built assembling plants in Indonesia. For sedans that are assembled in Thailand, we have been receiving zero tariffs.Jonkie exposed that the import duty policy really affects car selling prices and the expansion in Indonesian selling agents. Therefore, Hyundai needs to accelerate the construction of the plant that aims at maximally improve the domestic market.PT Kia Mobil Indonesia Marketing Director Hartanto said that most vehicles are delivered in the form of CKD so not all companies can enjoy the 0% import duty facility.To improve competitiveness in the domestic market, he added, the Kia Mobil tries to minimize the import duty up to 45% so selling prices can be more competitive compared to other sole agents receiving the facility of import dutyThe amount of import duties vary, depending on the type of vehicle, engine size and other terms. So, not all CBU models are imposed with 45% duties. Kia imports more CKD [than CBU] with lower duties, he explained. (t04/msw)

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