Auto-makers plead for continued government support

They said the extension would reduce the effects of high fuel prices on pickup manufacturers and drivers.

At present, the government subsidises diesel at 90 satang a litre through the State Oil Fund and the Energy Conservation Fund.

At a seminar yesterday entitled "The Turning Point of the Detroit of Asia: Directions for the Thai Automotive Industry in the Energy Crisis", organised by Krungthep Turakij newspaper, Thai Automotive Industry Association president Suparat Sirisuwannangkura said the government's energy policy was not clear enough, especially the price structure for natural gas for vehicles and liquefied petroleum gas.

"If the Energy Ministry does not extend its subsidy, pickup drivers will suffer from higher diesel prices and auto-makers will be hit by falling pickup sales in the domestic market," he said.

The Automotive Industry Club of the Federation of Thai Industries said domestic sales of pickups dropped a sharp 20 per cent month on month in June, due to the surging price of diesel.

Meanwhile, first-half production of pickups for the domestic and export markets grew 4.81 per cent and 21.85 per cent, respectively.

Passenger-car production in the first half surged 40.16 per cent year on year to 203,148 units, 45 per cent of which were exported, with the rest sold in Thailand.

Industry Minister Suwit Khunkitti said a softer price for diesel in the global market would lift pickup sales in the second half.

He told the seminar he was confident Thailand would achieve its goal of becoming the Detroit of Asia, thanks to the eco-car project and advantages from free-trade agreements with China, Japan, New Zealand and Australia.

"We're trying to accelerate the eco-car project, so that manufacturers will launch their products sooner. However, E85-compatible cars may be delayed until the price structure becomes clearer," he said.

Board of Investment (BoI) secretary-general Satit Chanjavanakul said Thailand would have to compete with rapidly growing automotive industries in China and India by positioning itself as the world's auto-production hub for export.

"As well, we're attempting to promote both energy-saving cars and alternative-fuel vehicles in the future, including hybrid and electric cars," he said, adding that local assembly of hybrid cars would be promoted by corporate income tax deductions and reductions in import taxes for components like batteries.

Satit said the BoI had approved 120 automotive-investment projects worth a combined Bt20 billion in the first half of the year, down slightly from 122 projects in the same period last year.