Clear auto policies needed, says expert

"I don't think I am in a position to advise about Thailand, but I'm willing to share my opinion. I think Thailand's automotive industry seems to be very successful. But I'm afraid carmakers could feel that the government is too proactive to anticipate long-term plans," Hans Roehm, global managing partner for the manufacturing industry at Deloitte Touche GmbH in Germany, said.

The cycle of the automotive industry involves four to eight years to develop each model at a huge cost, he said while on a visit to Bangkok. Therefore, it is not right to react to plans faster than the automotive cycle takes because car-makers will not be able to adjust their plans in line with the new policy.

"I prefer the what the US government did to promote the manufacturing of alternative-fuel cars. Its government announced a clear policy for several types of alternative-energy vehicles and let car-makers make their own decisions," he said.

On the government's policy to promote E85-compatible cars in Thailand, Roehm said it should consider carefully what the impact will be on the country's agricultural sector.

"Brazil's government promoted ethanol production in 1930 when it had too much surplus. In my view, it was successful because it could balance food and fuel production. Success really depends on each country's situation," he said.

In the long term, Roehm suggested Thailand would be better off finding another option such as downsizing car engines with higher efficiency to handle the energy crisis instead of focusing only on developing alternative-fuel vehicles.

He pointed to current trends in auto demands in global markets such as in the United States where change was immediate from 1.5 tonne pick-up trucks and super utility vehicles to B-platform cars. Demand in the short term was also falling as a result of skyrocketing oil prices.

He said the future of the industry would lie in the Asia Pacific market, particularly in China and India due partly to the transformation to individual mobility.

Meanwhile, there is no obvious demand shift in European countries as most of them already had a high proportion of compacts vehicles.