PT Timor Putra Nasional (TPN), commonly known as Timor, was an Indonesian automobile manufacturer operating between 1996 and 2000 originally formed by businessman Tommy Suharto. The company was created as a response to a presidential instruction (Inpres, Instruksi Presiden) regarding the development of the national car industry. The Indonesian government then appointed TPN as a sole 'national car pioneer'.
Throughout its operations, TPN imported cars made by Kia Motors from South Korea, both through built-up import and knock-down kit import route. TPN had to end its operations after the World Trade Organization (WTO) ruled the national car program was incompatible with WTO rules.
'Timor' is a syllabic abbreviation of ('People's Car Industrial Power/Technology'), although several sources said the Timor name was also chosen as a homage to the Timor island which was fully controlled by Indonesia as the East Timor occupation at the time was still ongoing, while 'Putra Nasional' means 'national son' or 'son of the nation'.
History
The company was created as a response to the presidential instruction (Inpres) No. 2 1996 on 28 February 1996 regarding the development of the national car industry, instructing the Minister of Industry and Trade, the Minister of Finance, and the State Minister for Mobilization of Investment Funds to immediately realize the national car industry. The presidential decree mentioned that companies could be granted a 'national car pioneer' status if their products were branded under their own, Indonesian-owned marque, were produced domestically, and used domestically made components. In particular, they had to achieve a minimum of 20%, 40% and 60% local content by the end of, respectively the first, second and third year of operation. The production facilities used for the manufacturing of these automobiles had to be fully owned by Indonesian interests and the eventual co-operation agreements with foreign automakers must not include commitments limiting the possibility to export. 'Pioneer' companies were exempted from duties on imported components (at 65%) and their products were exempted from luxury tax (35% for sedan vehicles) for a period of four years. Later, it was revealed that the Indonesian government approved TPN's production of automobiles in Indonesia more than three months before the announcement in February 1996.
The 'pioneer' status was then granted to TPN, a company that was 99 percent owned and controlled by Tommy Suharto, youngest son of then-president Suharto. TPN would be granted the 'pioneer' status and the financial support from the government if the company fulfilled the requirement requested by the Minister of Economy to produce 15,000 cars by September 1996. Tommy then quickly explored options to initiate a joint venture with foreign manufacturers. Lada and Iran Khodro was under consideration, but eventually Tommy picked Kia Motors as TPN's partner. TPN stated that the company chose Kia because unlike other manufacturers, the South Korean manufacturer allows TPN to produce, modify, rebadge and export its vehicles.
On 8 July 1996, TPN introduced Timor S515 as their first product in Sarinah Building, Jakarta. The car is a badge-engineered Kia Sephia and was initially imported from South Korea as the local manufacturing plant was not built yet. In order to smooth out the import plan, Suharto issued Presidential Decree No. 42 of 1996 which allowed PT TPN to import national cars without being subject to import duties. When the public questioned the practice, Tommy claimed the car was assembled in South Korea by Indonesian migrant workers. Between June 1996 and July 1997, a total of 39,715 cars were imported by TPN from Kia Motors. The cars were then distributed nationally through PT Timor Distributor Nasional. In 1997, TPN held 35.82 percent of market share in the compact sedan segment.
On 24 February 1997, construction of the assembly plant and component manufacturing plant started. Located in Mandala Putra Industrial Area, Cikampek, West Java, the US$1 billion plant was planned to be built and operated by PT Kia Timor Motors, a joint venture owned 70% by TPN and 30% by Kia Motors and would have the capacity to produce 50,000 cars per year. The component manufacturing plant would be operated by Timor Industri Komponen.
On 11 April 1997, TPN introduced the S515i, the fuel injection version of the S515. On 15 May 1997, knock-down assembly of the Timor S515i started in an assembly plant owned by PT Indauda Putra Nasional in Tambun, Bekasi.