Mazda seeks incentives for fuel-efficient SkyActiv

Mazda might just hope that the government considers offering tax incentives for fuel-saving and eco-friendly technologies such as its SkyActiv system, but if the wish is granted, it will significantly change the way vehicles are taxed here.

The Japanese auto-maker plans to launch the new CX-5 crossover in Thailand no later than next year, and hopes that it will be given tax privileges due to the vehicle's excellent fuel economy and low emission levels, with both figures comparable to hybrid vehicles.

Despite the government's promotion of eco-friendly technology, vehicle excise duty rates are still based on engine displacement and output, as well as engine types and compatibility with alternative fuels, rather than actual fuel economy and emission levels.

Takashi Yamanouchi, president of Mazda Motor Corp, said yesterday that the award-winning CX-5 features SkyActiv, which offers outstanding fuel economy and emission levels without requiring electric motor assistance, making it significantly more affordable for consumers.

The new technology, which revolves around engine/transmission efficiency and weight-saving techniques, will also make its way to existing models such as the Mazda2 and Mazda3.

He met with Finance Minister Kittirat Na-Ranong on Tuesday and discussed Mazda's new technology.

"We did indeed go to the government to explain the benefits of this new technology," he said.

In Japan, the CX-5 enjoys similar tax breaks as hybrid and electric vehicles due to its excellent fuel economy. The diesel version of the CX-5 claims average fuel consumption of just 4.5 litres per 100 kilometres (22.2km/litre).

In Thailand the excise duty is 10 per cent for electric and hybrid vehicles, 17 per cent for eco-cars, 25-50 per cent for E20 vehicles and 22-32 per cent for E85 vehicles depending on the engine size or output, with a 220-horsepower limit.

While the gasoline version of the CX-5 could qualify for the E20 excise rate, the diesel would not be eligible for any privileges, despite having average fuel consumption comparable to hybrid vehicles and eco-cars. "Regardless of what the Thai government decides, we will go ahead with the introduction of the CX-5," he said.

Mazda is having a ball in the market, with triple-digit sales growth during the last two years thanks to the introduction of the highly popular Mazda2 subcompact.

Last year it sold more than 42,000 vehicles and claimed a market share of 5.3 per cent, making Thailand its sixth-largest market globally, following Japan, China, the US and Australia.

For Thailand, Mazda has raised its projection to as much as 70,000 units for this year, and it is already eyeing 100,000-unit annual sales in the near future, which could help Thailand overtake Australia as Mazda's fourth-largest market in the world.

Mazda also plans to grow dramatically in Asean, with regional sales targeted at 150,000 units by 2015, although Thailand would remain its most important market.

"Just two years ago, our sales in Asean were 50,000 units, but this year we are getting closer to the 100,000-unit mark," he said.

Mazda vehicles are assembled at a plant in Rayong belonging to AutoAlliance Thailand, a joint venture with American auto-maker Ford Motor Co.

In May, it raised capacity for the BT-50 pickup truck by 20,000 units per year to cater to increasing demand.

While Ford has decided to cough up US$450 million to build its own passenger car plant in Rayong, Mazda has yet to make a decision. The new Ford plant has begun producing the Focus compact car, which will be formally launched in this market early next month.

"We will study production capacity enhancement to fully support our retail sales momentum," he said.

Due to robust growth in emerging markets, Mazda is expanding its production overseas.

"We will do more assembly in Asean, and will start production in Russia this year and in Mexico in 2014," he said.

Its only major production centre in Asean is AAT, while the Mazda2 is assembled in Vietnam in small numbers using CKD kits from Thailand.