REPUBLIKA.CO.ID, SEMARANG - An association of automotive industries in Semarang has declared its support to any proposal to scrap tax incentives to the Low-Cost Green Cars (LCGC) program. They believe that this government initiative interfered with the sales of mid-ranged cars.

"If the newly-elected president comes up with a proposal to repeal the LCGC program, it will have our support. This is because the cheap cars have interfered with the sales of mid-range cars ever since the program was implemented," the Chair of Semarang Automotive (Sauto), Basuki Wibowo, said on Tuesday.

The initial sales of LCGCs had affected the sales of cars that fell within the range of 200 million IDR (around 17,000 USD). According to Wibowo, the low-cost cars had also affected the sale of used cars in the region, as the sole agent swore by the belief that "with limited amount of money, it was better to buy cheaper cars than used ones."

On September 24, the Association of Indonesian Automotive Industries (Gaikindo) had mentioned that it would have no problem if the government decided to terminate the LCGC program.

"Businesses are flexible. They flow like water. If the sluice here is closed, the water will flow nevertheless and seek other gates," Gaikindo Secretary General Noegardjito had explained.

Yet, he had pointed out that the manufacture of LCGCs did not have any significant impact as they held only 15 percent of the market share of national automotive sales in the country. The remaining 85 percent was controlled by other automotive businesses.

Furthermore, Gaikindo records show that only 113,752 units of LCGCs were sold between January and August. Toyota Astra Motor "Agya" was the green car that sold the highest number of 46,399 units.

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