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Indonesian govt not to cut car production to reduce congestion

19th June 2012 | 1.818 Views
Indonesian govt not to cut car production to reduce congestion
MS Hidayat. (ANTARA)
Jakarta (ANTARA News) - Industry Minister MS Hidayat said the government has no plan to cut domestic car production to reduce traffic congestion in a number of big cities in the country.

"Although some parties have blamed motor-vehicles as the cause of traffic jams, the national automotive sector has been one of the drivers of economy growth in Indonesia," he said at a seminar on automotive industry here on Tuesday.

He said the domestic automotive industry is projected to reach one million units next year. With strong buying power and easy access to consumer credits for middle-income and below earners he believed the domestic market would continue to grow.

"The government would not suppress automotive production and I have also conveyed to the President to continue to encourage production and exports to Asian, African, Latin American and Middle Eastern regions. Automotive industry is one of the prioritized sectors in the national industry policy," he said.

He said the government`s strategy is developing full manufacturing including designing and engineering as well as producing components locally.

"Right now the average local content has reached 85 percent and efforts would be spurred to cover the rest 15 percent," he said.

Hidayat said that the limited road infrastructure in the country has so far been the main cause of traffic jams so far while land clearance has been one of the obstacles hindering road development so far.

To overcome the problems, he said the government has issued Law Number 2 of 2012 on land acquisition for development for public interests.

He said in the near future the government would issue regulations relating to the law including a regulation for its implementation to speed up road development projects.