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Automakers say govt rushing into Eco-Car project's Phase 2

Automakers who had participated in the eco-car project are not happy with the government's decision to launch Phase 2, claiming it's too soon to introduce it.

The comments came during a seminar organised by the Thai Automotive Journalists Association earlier this week that brought together representatives from the government as well as the industry to exchange views on the Eco-Car Phase 2 project.

Suparat Sirisuwannangkura, vice chairman of the Federation of Thai Industries and chairman of the Automotive Industry Club, said the eco-car project has been highly successful due to several reasons.

"It was able to win over customers from the motorcycle market, plus the rising fuel prices caused consumers to switch over to more efficient small cars," he said.

Since the project was launched in 2010, some 712,000 vehicles have been produced, with almost half of these being exported (343,000 vehicles exported versus 369,000 for the domestic market). Suparat said the market share of eco-cars has also risen dramatically, from 5 per cent in the passenger car market in 2010 to as much as 27 per cent this year.

He said the original eco-car project was expected to help Thailand achieve annual production of 3 million cars sooner than previously planned (2017-2018).

"We thought it would help us achieve the 3-million-vehicle mark a year or two before schedule, but many of the negative factors that are taking place in our country are causing manufacturers to reconsider. Although the Eco-Car Phase 2 project will definitely play an important role in Thailand's automobile industry in the future, what manufacturers who took part in the first project don't understand is why is it being introduced this soon," said Suparat, who is from Toyota Motor Thailand, the fifth and last company to launch an eco-car under the phase 1 project.

He added that although manufacturers are capable of responding to government policies, these policies should be long-term.

"This includes the energy policy, because in the past there have been too many changes, whether it is about oil, gasohol or CNG [Compressed Natural Gas] policies," he said, noting that presently a large number of LPG [Liquified Petroleum Gas] stations are still being opened due to their greater popularity than CNG.

Piengjai Kaewsuwan, president of the Thai Automobile Industry Association and the Asean Automotive Federation, said the Phase 2 project has raised concerns from automakers who took part in Phase 1. She said that while the first project is moving ahead successfully, the second phase will cause higher competition for those already taking part. Companies that had already made investments to participate in Phase 1 will need to re-evaluate whether taking part in Phase 2 will be profitable, due to the added investment required as well as the production requirement of 100,000 vehicles by the fourth year.

"The government requires new participants of Phase 2 to invest Bt6.5 billion, while those under the first project were required to spend Bt5 billion. However, each investment can be used to produced other models, so we should not be made to invest further. This is what we want the government to consider," she said.

Meanwhile, Board of Investment (BOI) secretary-general Udomchai Wongwittanachai said requirements that have been announced could not be changed, but the BOI is willing to talk to the private sector to see whether any changes in the details can be made, in order to ensure profitable investment and competitiveness.

These flexibilities include production requirement, for example combining CBU (Completely Built-Up) production with SKD (Semi Knocked Down) production.

"Or we can allow major components that are produced to be counted in value as one vehicle," he said. "We have high hopes for Eco-Car Phase 2 because we want it to become a new 'champion product' that will help boost the Thai auto industry. We are willing to support the private sector to achieve these targets by adjusting certain details that are not part of the major conditions."


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