Thailand approves 688 mln dlrs in eco-car investments

Yahoo News 4 Apr 08;

Thailand has approved three projects by leading automakers to build "eco-cars" in the kingdom, in deals worth a total 21.69 billion baht (688.57 million dollars), the Board of Investment said Thursday.

The deals announced in a statement by the Board will see Mitsubishi, Toyota and Tata Motors begin producing cars that meet the most stringent European emission standards and run on fuel with a 20 percent ethanol component.

Thailand has offered automakers generous tax breaks and other incentives to open facilities here to produce "green" cars, predicting that the global market for such vehicles will grow as consumers worry about high oil prices and fuel emissions blamed for global warming.

The newly approved projects will see Mitsubishi Motors invest 7.7 billion baht to produce 107,000 cars a year, as well as auto parts and machinary, starting in 2010.

Nearly 90 percent of the output would be for export, mainly to Australia, Japan and the rest of Southeast Asia.

Toyota Motors will invest 6.6 billion baht to produce 100,000 cars a year as well as related machinery. The cars would be sold locally and in other Asian countries, with production beginning in 2012.

India's Tata Motors will invest 7.3 billion baht to manufacture 100,000 cars annually, starting in 2010. Around half the output would be exported around Asia and South Africa.

The projects would significantly boost Thailand's vehicle output, which reached 1.3 million units last year.

Another proposal by Europe's biggest automaker Volkswagen is still waiting from the Board's approval. Reportedly worth 27 billion baht, the Board did not say why the project was not yet approved.

Thai media reported that approval could take longer simply because of the size of the deal.

An official at Volkswagen's local office declined to give any details about the project.

Thailand does not have a domestic car company, but the kingdom wants to position itself as "the Detroit of Asia" by becoming a key regional production base for international automakers.

The country is already the world's biggest producer of light pickups, churning out 900,000 trucks every year -- about three-fourths of global output.