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Facing gridlock, Jakarta takes aim at cheap, green car drive

Published on Dec 11, 2013 6:25 AM
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Vehicles are seen stuck in a traffic jam during rush hour in Jakarta on June 14, 2013. Indonesia's president wants to revive a flagging economy by selling cheap, fuel-efficient cars to an emerging, aspirational middle-class. The governor of Jakarta, the capital, says this will further choke his city's gridlocked streets, and strangle growth. -- FILE PHOTO: REUTERS

JAKARTA (REUTERS) - Indonesia's president wants to revive a flagging economy by selling cheap, fuel-efficient cars to an emerging, aspirational middle-class. The governor of Jakarta, the capital, says this will further choke his city's gridlocked streets, and strangle growth.

Caught in the middle of this tug-of-war between arguably the country's two most powerful politicians are local and Japanese carmakers hoping to boost revenue in a city that alone accounts for up to 60 per cent of sales in Southeast Asia's largest economy.

Automakers, including Toyota Motor Corp, Honda Motor Co and Nissan Motor Co and Daihatsu Motor Co, have spent at least US$3 billion (S$3.7 billion) this year on a new line of low-cost, green car (LCGC) models aimed at millions of Indonesians now looking to scale up from two wheels to four, government officials said.

But Jakarta Governor Joko Widodo - a favourite to win presidential elections next year, if he runs - is discouraging drivers by raising taxes, parking prices and traffic fines, fearing a flood of new cars will bring one of the world's most congested cities to a standstill.

 
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