Manufacturers are urging the government to focus on the export market for small and fuel-efficient eco-cars instead of aiming at Thai buyers.

Yongkiat Kitaphanich, president of the Thai Auto-Parts Manufacturers' Association, said the government should study other countries' demand for cleaner, greener vehicles, in order to stimulate exports.

The government earlier this week approved an eco-car programme, promising tax incentives to carmakers. Industry Minister Kosit Panpiemras said the Board of Investment (BoI) would provide "favourable" tax incentives for manufacturers that met eco-car requirements.

However, Yongkiat urged the government to aim at expanding this market for foreign consumption, because if manufacturers aimed at selling only in the local market, eco-cars would snatch market share from other segments. If that were the case, the promotion of eco-cars would not boost economic growth.

He added that he would like the government to establish an automotive-parts testing centre, in order to raise the competitiveness of the industry.

Ford Thailand, meanwhile, said it would keep the BoI's offer in mind when reconsidering the eco-car project but added that the step must be taken only after consultation with all car manufacturers.

The BoI's decision to bring the eco-car back to the discussion table has troubled some carmakers, due to the lack of advance notice.

"The eco-car is a very good idea for the Thai market, which requires a small car that is fuel-efficient and cheap, but the government must consider which way it wants to go," said Ford Thailand president Tom Brewer. "Small cars which provide high fuel-efficiency need expensive technology to be produced. Another option would be to seriously consider alternative fuel, which is more feasible in a country like Thailand, where there is a lot of agriculture."

The BoI will consider different opinions from manufacturers and choose the one that provides the best investment and gives the highest benefits to the country. That model will then be used to set the criteria for the eco-car.

The BoI also believes the previous target of producing 1.8 million eco-cars by 2010 is unlikely to be reached. Manufacturers had previously stated Thailand would not be able to reach such a target with only pickups as its main automotive export.

Brewer said foreign markets must clearly be studied. There are no countries that need small cars in large numbers, which would be required to support mini-car production in Thailand. Eco-car production, if started, would probably affect pickup manufacturers producing Thailand's top brand.

Although manufacturers have expressed unhappiness, very few of them have considered the advantages an eco-car would bring to the general public.

While countries like Malaysia have a national car programme that provides consumers with vehicles priced between Bt300,000 and Bt400,000, Thailand has none. This makes the bridge between motorcycle to automobile a harder obstacle. The cheapest cars available in Thailand are currently priced close to Bt500,000.

Industry insiders believe the BoI's decision to bring back the eco-car project quickly is due to fears of losing investment to China.

Toyota previously announced it had begun developing a small car for the Thai market. Whether this model is the one Toyota hopes to sell as an eco-car is unknown. Toyota officials were not available for comment.

Vijo Varghese,

Chalida     Ekvittdhayavechnukul

The Nation