Imported cars held in Batam

Fadli , The Jakarta Post , Batam | Fri, 03/26/2010 10:25 AM | The Archipelago

Car dealers in Batam, Riau Islands, have imported and marketed hundreds of completely built-up (CBU) cars despite the absence of import regulations, leaving the cars being held by

the local Customs and Excise Office.

An importer in Batam, PT GA, has recently received orders for 24 units of Wish, Harrier, Camry and Altise cars from Toyota.

The cars, sent to Batam through Singapore, arrived early this month, but due to the lack of regulation on these particular types of cars, the local Customs and Excise Office said they could not be released from the port’s warehouses.

Another importer experienced similar problems when it imported 60 units of VW Beetle cars at the end of last year.

“We don’t understand why the technical regulations are not made clear by the government. Our customers are really disappointed. On top of that, we have already paid for the cars,” PT GA Batam’s marketing manager Antoni told The Jakarta Post.

He said the market for luxury CBU cars in Batam was relatively good especially because they are cheaper compared to other places.

He said a Toyota Harrier, for example, cost only Rp 400 million a unit in Batam, which, along with neighboring Bintan and Karimun Islands, is a Free Trade Zone.

The same model of car sells for Rp 700 million in Jakarta thanks to value-added and luxury taxes

imposed on vehicles, electronics and liquor in the zone.

Separately, acting head of the Batam Customs and Excise Office Heru Setioko called on importers to wait until the office issued its technical direction for the import of CBU cars before importing.

“It’s not yet clear what form we have to use for CBU cars imported to Batam, as free trade in

Batam is provided for production activities and not for consumer goods,” Heru said.

Many have expressed concerns that opening up imports of CBU cars to Batam would create a chance for the smuggling of these cars to other parts of the country. This is mostly due to the limited number of consumers of this commodity.

Chairman of Commission II of the Batam municipal legislative council overseeing the economy, Yudi Kurnain, said that there was a chance that CBU cars imported to Batam would be sent to other potential markets, including Jakarta.

“It’s surprising that such cars are not seen on the streets of Batam,” Yudi said.

Yudi called on police, the Customs and Excise Office and the navy to tighten surveillance on the smuggling of luxury cars out of Batam.

He said a single smuggled car could cause hundreds of millions of rupiah in state losses due to unpaid taxes.

“The free trade zone is limited to industrial production activities, and not for consumption purposes. It’s completely wrong to have the concept benefit the consumer sector,” Yudi said.