Incentives from the Thai government to encourage automakers to produce fuel-efficient "eco-cars" have yielded a raft of major investments and started to change how Thais drive, experts say.
Tax breaks for automakers and car buyers were unveiled last year, as the government worried that Thailand's position as the world's biggest maker of light pickups might not be enough to guarantee the future of its auto industry.
The kingdom churns out 900,000 one-tonne trucks every year - about three-fourths of global output. But amid soaring oil prices and concerns about greenhouse gas emissions, the government expressed concern that the global market for gas-guzzling trucks could weaken as consumers turn to more fuel-efficient cars.
So last year Thailand announced incentives to encourage automakers to set up local production bases for "eco-cars" that meet the most stringent European emission standards and run on fuel with a 20 percent ethanol component.
Sales taxes on smaller cars were also slashed from January 1, which sent sales booming in the first two months of the year. "First-time car owners, and especially motorcyclists who want to become car owners, are cost-conscious consumers," said Surapong Paisitpatnapong, spokesman for the Federation of Thai Industries' automotive club.
"Investments in eco-car production will help grow this new segment of the country's domestic auto market while increasing exports," he said. Seven automakers - including Toyota, Volkswagen, and India's Tata - have proposed eco-car projects to Thailand's Board of Investment. Four have already been approved, according to Surapong.
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