The Board of Investment (BoI) on Wednesday approved the second phase of the eco-car scheme amid a warning from automakers about market oversupply.
Car manufacturers must submit applications to the BoI by March 31, 2014 and begin production within 2019.
The first batch of manufacturers can apply to expand production or reinvest in phase II with no less than 5 billion baht of capital (excluding land costs). But new manufacturers must invest no less than 6.5 billion baht.
The second phase will focus on economy, consumer and social goals.
The economy factor aims to increase investments in car manufacturing clusters to strengthen Thailand as car manufacturer and export base in the region while consumer is to boost safety and fuel efficiency of the vehicles. Finally, the social factor must support the expansion of cities by reducing carbon dioxide emissions. Manufacturers must produce no less than 100,000 cars a year from the fourth year onward.
All new phase II eco-cars must meets the Euro 5 environmental standard of releasing less than 100 grammes per 100 kilometres of carbon dioxide. Fuel efficiency must also be increased from 5 litres per 100km in the first phase to 4.3 litres per 100km.
The engine size must be no more than 1300cc for petrol-fuelled engines and 1500cc for diesel.
BoI secretary-general Udom Wongviwatchai said manufacturers will also receive tax exemption privileges for six years. The BoI has approved extra incentive for car manufacturers to use parts produced in Thailand.
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Writer: Nop Tephaval