Indonesia’s largest automotive firms, Toyota Astra Motor (TAM) and Astra Daihatsu Motor (ADM), unveiled on Wednesday two jointly developed compact cars — the Astra Toyota Agya and the Astra Daihatsu Ayla.

Yukitoshi Funo, the executive vice president of Toyota Motor Corporation (TMC), said that the fuel-efficient city cars would strengthen the cooperation between Toyota and Daihatsu that was initiated in 2003 through the production of the Toyota Avanza and Daihatsu Xenia, which have become Indonesia’s top-selling cars.

“Agya and Ayla are new concept cars designed for the Indonesian market based on Daihatsu’s expertise in compact car production,” he said during his remarks at the models’ launch on Tuesday in Jakarta.

TAM has not set the price of the Agya, while ADM says that the Ayla may be sold between Rp 75 million (US$7,875) and Rp 105 million. ADM president director Sudirman Maman Rusdi said that both models would be produced in Daihatsu’s new plant in the Suryacipta industrial estate in East Karawang, West Java. The plant, built with an investment of Rp 2.1 trillion, is entering the final stage of construction and is slated to kick off operations in October.

It will be able to produce 100,000 units per year after becoming fully operational next year.

“After the government introduces the incentives, we will calculate how many units to produce and we will start production,” Sudirman said.

The Daihatsu executive said that all the technical specifications for the cars had been finalized, with basic requirements under the government’s planned rule on low-cost green cars being met.

The cars, for example, are designed to utilize local content for 84 percent of their assembly, with parts sourced from 120 local first-tier and 600 second-tier component makers, according to Sudirman.

The cars are slated for display at the Indonesia International Motor Show as it kicks off on Thursday at the Jakarta International Expo in Kemayoran.

ADM marketing director Amelia Tjandra declined to specify the price of the Ayla as the cars would be sold only after the government’s rule was issued.

However, she said that ADM would take orders for the Ayla with indicative prices ranging from Rp 75 million to Rp 105 million.

TAM president director Johnny Darmawan also declined to comment on the price of Agya.

Industry Minister MS Hidayat said that the government would soon issue a presidential regulation for its low carbon emission program, which covered various kinds of eco-friendly cars, such as hybrid and electric models, apart from low-cost and green cars.

Although he refused to give a time frame for the regulation’s issuance, Hidayat hinted that the long-delayed incentive would be the reduction of sales taxes on luxury goods (PPnBM) to as low as zero percent.

According to the draft rule, automobile manufacturers will be eligible for the lower tax rate when making cars with 1,000-cc engines that can travel farther than 22 kilometers on a liter of fuel, or cars with 1,200-cc engines that can run more than 20 kilometers per liter.

A low-cost car is said to sell below Rp 100 million, which can reach Indonesian masses seeking to shift from motorbikes to cars.

As more than half of its 240 million inhabitants enter the emerging middle class, Indonesia has become a very lucrative market for cars as well as motorcycles, both key indicators of consumption in Southeast Asia’s largest economy.

Car sales hit a record high last year, totaling 894,164 units, up 19.93 percent from 2010.

From January to August this year, sales amounted to 714,152 units, up 23.13 percent from a year earlier, with local automakers expecting sales to exceed the 1 million mark by year’s end.

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