The Industry Ministry expects annual eco-car production to surge by nearly 60% to 935,000 units within five years as the second phase attracts investment for the small vehicles.
The first phase, which was launched in 2007, attracted investment of 28.8 billion baht. Mitsubishi, Honda, Toyota, Nissan and Suzuki joined the first phase, with combined annual capacity of 585,000 vehicles.
Udom Wongviwatchai, secretary-general of the Board of Investment (BoI), said several more car makers are expected to join the second phase of the scheme with investment of 30-40 billion baht.
Car manufacturers must submit applications for the second phase to the BoI by next March.
"Once approval has been given in mid-2014, investment will start a year later at the earliest," said Mr Udom.
The first batch of manufacturers can apply to expand production or reinvest in the second phase with a minimum of 5 billion baht in capital excluding land costs.
New manufacturers must invest no less than 6.5 billion baht.
They must produce a minimum of 100,000 vehicles annually from the fourth year onward.
All new eco-cars must meet the Euro 5 environmental standard of releasing less than 100 grammes of carbon dioxide per 100 kilometres compared with 120 grammes for existing models.
Fuel efficiency is required at 4.3 litres per 100 km, up from five litres in the first phase.
Engine size must be no bigger than 1,300cc for petrol-engine types and 1,500cc for those running on diesel.
The programme offers a six-year tax break plus an additional incentive for manufacturers that source parts locally.
Somchai Harnhirun, director-general of the Office of Industrial Economics, said production capacity for eco-cars in the first and second phases is planned at 745,000 vehicles in 2016, 825,000 in 2017 and 935,000 in 2018.
Industry Minister Prasert Boonchaisuk said the upshot is that Thailand's total vehicle production will hit 3 million units by 2017, with 70% exported compared with 50% at present.
About the author
- Writer: Nanchanok Wongsamuth
Position: News Reporter