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Jakarta Post

Jokowi questions cheap car policy

After speaking to national mass media on Tuesday, Jakarta governor Joko “Jokowi” Widodo sent an official letter to Vice President Boediono questioning the central government’s new policy encouraging the production of “low-cost green cars”

Corry Elyda (The Jakarta Post)
Jakarta
Thu, September 19, 2013

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Jokowi questions cheap car policy

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fter speaking to national mass media on Tuesday, Jakarta governor Joko '€œJokowi'€ Widodo sent an official letter to Vice President Boediono questioning the central government'€™s new policy encouraging the production of '€œlow-cost green cars'€.

Jokowi said on Wednesday that he had sent the letter because the policy undermined the 17-step program previously ordered by Boediono to immediately mitigate traffic congestion in the city.

Among the 17 steps, the vice president had urged the city administration to implement an electronic road pricing (ERP) program, keep the Transjakarta bus lanes clear of other vehicles and regulate street parking.

The central government'€™s new policy, which was first announced last year, is part of a carbon emissions reduction program that seeks to spur the development of fuel-efficient, eco-friendly vehicles, including hybrid, electric and other low-cost green cars.

To this end, President Susilo Bambang Yudhoyono issued a government regulation providing fiscal incentives, which included reducing the luxury tax on locally produced cost-effective green cars '€” those that cost around Rp 100 million (US$10,363) and get 20 kilometers per liter.

Last week, giant automotive distributors Toyota Astra Motor (TAM) and Astra Daihatsu Motor (SDM) released new low-cost green cars, under the brands Agya and Ayla, respectively, ranging in price from Rp 76 million ($6,623) to Rp 120 million.

The two companies, both subsidiaries of PT Astra International, hope to sell 30,000 low-cost green cars by year'€™s end.

Although the cars were just launched, around 10,000 people have already pre-ordered the Toyota Agya, and another 8,000 have ordered the Daihatsu Ayla.

The two models, which are priced below Rp 100 million, will also be introduced at the upcoming Indonesia International Motor Show (IIMS).

Deputy Governor Basuki '€œAhok'€ Tjahaja Purnama said he was pessimistic that the letter would cause the central government to revoke the regulation.

'€œThe most important thing is that we have delivered our viewpoint,'€ he said.

Ahok said the city administration would tackle the increase in cars with an ERP. '€œIt'€™s OK for you to buy a cheap car, but can you afford to pay Rp 100,000 when driving on a road?'€ he said.

Besides an ERP, the city administration is also ramping up other policies, such as a plan to operate more public buses, increasing parking prices and implementing an odd-even license plate program.

According to environmental organization Committee for Leaded Gasoline Phase-out (KPBB), 600,000 vehicles had been sold in the first half of 2013 and that number would double to 1.2 million by the end of the year.

KPBB researcher Anthony Ladjar supported the action taken by the governor, saying that the city administration usually went along with every central government policy.

He said that seen in terms of purchasing power, half of the market for low-cost green cars would probably be in the capital city.

'€œWe are concerned that people who usually ride motorcycles will switch to cars,'€ he said.

He said his organization had urged the government to delay the distribution of new cars because, according to KPBB research, 10 cities, including Jakarta, Bandung, Denpasar, Yogyakarta and Medan, suffered from traffic congestion.

He added that the governor could order the Jakarta Police to deny permits for the new cars as a way to keep the new vehicles off the city'€™s roads.

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