The hybrid electric vehicle (HEV) market in Thailand is expected to intensify as automakers announce investment plans, with Chinese-Thai joint venture SAIC Motor-CP and MG Sales (Thailand) unveiling plans to produce HEVs under the MG brand in Chon Buri by 2025.
MG is looking for a new business opportunity in the domestic market where HEV sales have increased rapidly, especially after the Board of Investment (BoI) launched an investment incentive package to promote HEV manufacturing, said Pongsak Lertruedeewattanavong, vice-president of MG Sales (Thailand).
"We are considering an investment budget for the HEV production project, which will be finalised soon," he said.
Manufacturers seeking the excise tax cut incentive are required to invest at least 3 billion baht to produce HEVs domestically, according to the BoI.
Japanese automaker Nissan Motor Thailand said earlier it also plans to focus on manufacturing HEVs at its factory in Samut Prakan, but has yet to announce investment details.
MG already launched the HEV mid-sized model MG3 Hybrid+, often called the B-segment.
The company plans to initially import the cars from China, then produce them locally in the future.
Up to 40% of HEV components will be sourced from local auto parts makers, in line with the government's policy of supporting the Thai supply chain, the company said.
HEV sales in the domestic market grew significantly during the first half of this year, even though the overall automotive market turned sluggish, mainly because auto loans became harder to access as household debt remains elevated in the country.
From January to June, sales of HEVs soared by 69.6% year-on-year, compared with a 6.9% gain for battery EVs, according to the Federation of Thai Industries.
MG was among the first car companies to acknowledge the growth potential of Thailand's EV industry, investing 30 billion baht to bolster its EV business in the nation over the past decade.
The company's factory in Chon Buri has an annual production capacity of 100,000 cars, including battery EVs and internal combustion engine-powered cars.
Mr Pongsak said he expects the Thai automotive market to pick up in the second half this year, with sales already hitting their low point for 2024.
"We believe financial institutions will start to relax their lending criteria, which will result in buyers being granted more auto loans," he said.
Total car sales in Thailand are expected to tally 640,000-650,000 units this year, according to the company.