Indonesia's Astra denies report of Geely tie-up

JAKARTA, Nov 2 (Reuters) Indonesia's largest automotive distributor, PT Astra International Tbk , denied on Thursday a media report that it planned to team up with Chinese automaker, The Zhejiang Geely Holding Group.

Xinhua news agency reported Zhejiang Geely planned to jointly establish a factory with a local car maker near Jakarta to assemble Geely cars, and would sell them in Southeast Asian countries in the near future.

Xinhua said under the agreement Geely would provide equipment, technology and personnel training while Astra would offer workers and workshops.

''That's not true, we have no cooperation with Geely, we have nothing with them, the report was unsubstantiated,'' said Richard Santosa, Astra's head of investor relations.

Astra controls more than half the automotive sales in Southeast Asia's largest economy. Singapore's Jardine Cycle&Carriage Ltd is the controlling shareholder of Astra, which has businesses ranging from automotives to banks and plantations.

Global automakers are targeting Indonesia to tap into the growing compact cars market, which has been gaining importance after the government sharply increased fuel prices last year to scale back its costly fuel subsidies.

China's Chery Automobile has introduced and set up a production facility for its Chery QQ model. The model has an 800 cc engine and is priced at just over ,000, making it one of the cheapest passenger cars in the country.

REUTERS DKS DS1512