Auto-maker looks for eco-car steer
A carmaker has asked the government to release the criteria for eco-cars as soon as possible, otherwise it may build a plant in another country, an executive at Asian Honda Motor said last week.
The criteria were expected to be completed last month, but new Finance Minister Chalongphob Sussangkarn asked for two weeks to consider whether he should reduce the excise duty to attract auto-makers to invest in environmentally friendly cars here. Until now, there has been no sign that the Finance Ministry will revise its tax structure soon. Two weeks ago Deputy Finance Minister Sommai Phasee talked with the six auto-makers that had submitted eco-car proposals to the Board of Investment in December. After the meeting, he told reporters it would take a few months more because the carmakers could not specify their export plans for the green-car project. The Honda source said the marketability of the small cars overseas depended on many factors, which were still unclear. "Who will be able to tell how many units are for domestic sale or export unless we know the government's criteria?" For example, if the government decides not to lower the excise on eco-cars, auto-makers would have to sell them at a higher price to cover the higher production costs. Exports will also be at a low level because they would lose competitiveness in the world market. He said one of the Board of Investment's requirements was that an eco-car had to save 20 litres of fuel per kilometre. That would increase unit production costs by 30 per cent. Thailand is the regional leader in automobiles and auto parts, but neighbouring countries such as Malaysia and Indonesia have launched an aggressive strategy to drive their auto industry. While countries like Malaysia have a national car programme that provides consumers with vehicles priced at Bt300,000-Bt400,000, Thailand has none. The cheapest cars available here are priced close to Bt500,000. India, China and Indonesia fully support their auto-makers in churning out environmentally friendly cars. They pay only 16 per cent in excise duty in India, but makers of eco-cars here will have to fork out 30 per cent if the government does not reduce the rate for them. Some Japanese and South Korean companies have already established their production base for eco-cars in India. The source said those firms would get a head start in the global market if they succeed in launching their models first. "The government should speed up its work before all auto-makers flee from Thailand," he stressed. "If it really happens, Thailand's automobile industry will face a tough situation in the future."
Chalida Ekvitthayavechnukul The Nation
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