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Published on December 8, 2007

Altogether seven auto-makers have applied to build eco-car plants requiring investment of more than Bt40 billion, and the Board of Investment has now approved them for Honda, Nissan and Suzuki.

The other four projects were proposed by Toyota, Mitsubishi, Tata and Volkswagen on November 30.

Each auto-maker is required to invest at least Bt5 billion to win BoI's tax incentives.

The investment-promotion agency expects to consider and approve all remaining eco-car projects by next month, Deputy Prime Minister and Industry Minister Kosit Panpiemras said while expressing satisfaction with the overwhelming interest in the government's plan for a second pillar in its "Detroit of Asia" policy.

"This should be a role model for the BoI to encourage investment in other industries by considering the country's benefit its priority," he said.

Eco-cars are either petrol-fuelled vehicles with an engine size of no more than 1,300 cubic centimetres or diesel-fuelled vehicles with engines up to 1,400cc. They must not consume more than one litre of fuel for every 20 kilometres and must emit no more than 120 grams of carbon dioxide per kilometre.

No eco-cars are produced here yet, but the government is trying to turn the country into a production centre for them.

Suzuki Motor, with Bt9.5 billion, plans to produce 138,000 eco-cars a year in Rayong, 19 per cent of which will be sold locally, with the rest exported to Asia, Australia and Africa, Kosit said after chairing the regular BoI meeting.

Fellow Japanese carmaker Siam Nissan Automobile will invest Bt5.55 billion in making environmentally friendly cars in Samut Prakan, with annual capacity of 120,000 units. It will export most of its output to Asia and Australia.

Asian Honda Motors, with Bt6.7 billion, will locate its 120,000 unit-a-year eco-car assembly facility in Ayutthaya.

Kosit was also pleased with the country's level of direct investments this year. He estimates total approved projects would be worth nearly Bt700 billion this year, up from Bt373.5 billion last year.

The BoI has already approved investment applications worth about Bt650 billion this year, particularly for automobile, electronics, petrochemical and ethanol plants.

"I always said the Kingdom's investment would recover in the third quarter. I believe the momentum of investment will continue gaining steam in the coming year," he said.

Although he declined to comment on the country's economy in the coming year, he believes domestic consumption would increase in line with the new investment.

Chalida Ekvitthayavechnukul

 The Nation