Japanese truck maker Isuzu Motors Ltd has made a pickup with a smaller engine and carbon dioxide (CO2) emissions of less than 200 grammes per kilometre to avoid the brunt of a new excise tax taking effect next year.
The new Isuzu D-Max, with a 1.9-litre Ddi Blue Power diesel engine that releases 161 g/km of CO2, made its worldwide debut on Monday with a retail price range of 490,000-928,000 baht.
The company's strategy is to support Thailand's environmentally friendly policy with the world's first 1.9-litre pickup, which is smaller than regular trucks in the market with engines ranging from 2.5 to 3.0 litres, said Hiroshi Nakagawa, president of Tri Petch Isuzu Sales Co, the local distribution arm.
"Although Isuzu makes a smaller engine, its efficiency is still equal to that of the 2.5-litre pickup," he said. "Isuzu will see a lesser impact from the new tax regime, so the company does not need to produce a massive volume this year."
From 2016 on, vehicles sold in Thailand will be subject to a new excise tax based on CO2 emissions, E85-gasohol compatibility and fuel efficiency, rather than just engine size as before.
The excise tax on eco-cars with CO2 emissions below 100 g/km will be cut to 12-14% from 17%, but the 10% rate for hybrid vehicles will remain.
Under the new tax structure, the rate for pickups that release CO2 of less than 200 g/km will be subject to an increase to 5% from 3% for a space cab. The rates will be unchanged at 3% for a single cab and 12% for a double cab in the segment.
Large pickups, passenger cars and pickup passenger vehicles (PPVs) normally have high emissions and will be subject to a higher tax.
For vehicles with emissions greater than 200 g/km, the tax rate will increase to 5% for a single cab, 7% for a space cab and 15% for a double cab.
Isuzu is concurrently launching a new D-Max with a 3.0-litre diesel engine and a price range of 573,000-1,004,000 baht.
The Isuzu D-Max had its world premiere in Thailand in May 2002. The second generation came to market in October 2011.
The model has achieved sales of 3 million units worldwide.
The company has no plans to install the 1.9-litre engine in Isuzu PPVs such as the MU-X, which would be subject to a higher tax.
Isuzu posted sales of 101,979 units in Thailand over the first three quarters, representing a 15.1% year-on-year decline. Some 90% of sales are from pickups and PPVs.
Mr Nakagawa expects Isuzu's sales to decline from 160,286 vehicles last year to 144,000-148,000 this year, citing the sluggish market.
Isuzu marked its highest sales ever in Thailand in 2012, up 61.4% from 2011 to 213,380 vehicles, fuelled by the previous government's first-time car buyer scheme.
In 2013, sales fell by 3.3% to 206,233 vehicles.
All Isuzu vehicles are made at two plants in Samut Prakan and Chachoengsao, with a combined production capacity of 366,000 units a year.