Tata Motors will delay selling the Nano in Thailand until after the first-time car buyer programme expires, said an industry source.
The introduction of the Nano _ by some estimates the world's cheapest car _ was previously set for early this year but was postponed in light of the influx of eco-cars being offered by Japanese carmakers in Thailand.
The first-time car buyer programme, which rebates taxes paid by first-time buyers purchasing certain types of automobiles, further weakened the competitive position of the Nano.
Tata had planned to distribute its super cheap car in Thailand and held roadshows for the Nano in many provinces to test the market.
The roadshows were successful, encouraging Tata to import the Nano for marketing and selling in Thailand.
But the industry source said Thai-built eco-cars are priced as low as 380,000 baht, effectively 310,000 baht once the tax rebate under the first-time car buyer scheme is factored in.
Eco-cars meet all the criteria of the scheme. They are locally built, priced under 1 million baht and have engine displacement of less than 1.5 litres. The tax rebate is capped at 100,000 baht.
The Nano, built in India, is not qualified for the programme and attracts an import duty of 80%. The car is also subject to an excise tax of 30% and must be shipped to Thailand, further adding to the final price.
The Nano costs slightly more than 100,000 baht in India, but once the car has reached the Thai market the price is 270,000-280,000 baht, too close to the price of eco-cars to be competitive.
With a 0.6-litre engine, the Nano is also considerably less powerful than most eco-cars, which can have engines as large as 1.5 litres.
The first-time car buyer programme is scheduled to end this year but might be extended due to the floods.
The Nano to be sold in Thailand will have electric power steering, anti-lock brakes and others features not standard on the car when it is sold India.