He is confident that if they start manufacturing, the project should generate investment of Bt20 billion.

The overall investment could reach Bt100 billion if parts manufacturing is taken into account.

"At the moment, we see strong will from two Japanese companies to establish plants for producing energy-saving cars here," he said.

The criteria for the eco-car project will be announced by the Board of Investment (BoI) next month.

Chakramon said that at least two auto companies would then set up plants for environmentally friendly cars here. However, he declined to reveal their names.

In December, six companies submitted their proposals to the BoI for the eco-car project: Nissan, Suzuki, Honda, Mitsubishi, Toyota and Yontrakit.

Meanwhile, Chakramon said the BoI was consulting with the Finance Ministry and the Excise Department about fixing an appropriate tax rate for eco-cars.  "The rate for general cars is fixed at 30 per cent. In my opinion, the tax rate for eco-cars should be about 20 per cent in order to attract investors," he said.

However, the rate should not be less than 20 per cent because this may distort the overall car market, he added.

Although the investment atmosphere is cloudy at the moment, he insisted the

government agency would consider incentives for manufacturers of eco-cars as soon as

possible.

Chalida Ekvitthayavechnukul

The Nation