Automakers are reluctant to join the eco-car project's second phase because some criteria are quite rigid, a seminar was told yesterday.
A model poses with the A:Wind by Suzuki, one of the eco-car manufacturers at the Motor Expo. PATTARACHAI PREECHAPANICH
The areas they find inflexible involve capital and production conditions.
"Convincing the five existing eco-car makers to join the new phase is not easy, as they have to launch products that not only meet the new specifications but also the new excise tax which is due to become effective in January 2016," said Piengjai Kaewsuwan, president of the Thai Automobile Industry Association and chairwoman of the Asean Automotive Federation.
The seminar was held on the sidelines of the Thailand International Motor Expo 2013 at Impact Muang Thong Thani, which ends next Tuesday.
The Board of Investment scheduled a March 31, 2014 deadline for applicants to submit eco-car investment plans.
To be eligible for investment privileges, they must invest at least 6.5 billion baht to build a new plant with an annual production capacity of 100,000 units within four years of operation.
Eligible cars for the second phase must emit less than 100 grammes of carbon dioxide per kilometre.
The government will waive corporate taxes and import duties for machinery for the first eight years of operation.
Participating car makers will also enjoy an excise tax as low as 14%, while E85-compatible eco-cars will be taxed at 12%.
The Industry Ministry expects annual eco-car production to surge by nearly 60% to 935,000 units within five years as the second phase attracts investment for the small vehicle.
The first phase, which was launched in 2007, attracted investment of 28.8 billion baht. Mitsubishi, Honda, Toyota, Nissan and Suzuki joined the first phase.
Accumulated production of eco-cars between 2010 and 2013 from the five car makers amounted to 712,292 cars, with Nissan making up 53.8%.
Accumulated domestic sales totalled 369,509 units, 54.1% of which were controlled by Nissan.
Over the first 10 months of this year, eco-car output stood at 296,187 units, 43.3% of which belonged to Mitsubishi and 32.6% to Nissan.
Domestic sales of the segment totalled at 146,985 units for the period.
Ms Piengjai, also the vice-president for government relations of Nissan Motor (Thailand), said the minimum investment should be 5 billion baht instead of 6.5 billion.
Suparat Sirisuwannangkura, chairman of the auto industry club of the Federation of Thai Industries (FTI) noted it is a bit too early for the government to kick off the new phase, saying eco-car makers themselves are still busy meeting the criteria in the first phase.
He added most car makers are also worried about the continuity of the government's energy policy.
"Whenever an automaker makes an investment decision on long-term production of 20 years, it has to come up with a production plan and product designs which are compatible with local energy types," he said.
According to Udom Wongviwatchai, the BoI's secretary-general, at least four automakers are expected to apply soon for the second phase, drawing the combined investment value of around 23-26 billion baht.