Japanese carmaker Honda Motor Co says it will expand in the Asia-Oceania market by offering hybrid cars in the near future, as the area is an under-developed market for electric vehicles (EVs).
The expansion includes a plan to submit an application for Board of Investment (BoI) incentives to invest in producing hybrid cars under the Thai government's EV promotion, which is due to expire at the end of this year, say the company's executives.
Investment in Thai hybrid and EV cars is in accordance with the parent company's focus to expand hybrid car production in Asean countries.
Shinji Aoyama, president and chief executive of Bangkok-based Asian Honda Motor, said the Asean market in particular has to start with hybrid electric vehicles (HEVs), not with plug-in hybrid electric vehicles (PHEVs), battery electric vehicles (BEVs) or fuel-cell electric vehicles (FCVs).
"Asean countries are under development and still undergoing expansions for all types of electric cars. Honda still prefers to concentrate on providing hybrid cars, which are the most affordable cars in many countries in the region," he said during Honda Asia and Oceania Journalist Meeting 2017 in Tokyo last week.
The company reported that Honda's sales of all electric cars worldwide reached 2.19 million as of last month, while the highest sales volume was in Japan with 1.52 million. North America and Europe came second and third with 461,550 and 138,856 units, respectively.
But the region of Asia-Oceania saw only 56,252 EVs sold.
Takahiro Hachigo, chief executive of Honda Motor Co, said Honda's business strategy aimed at having two-thirds of all Honda cars worldwide be electric ones within 2030.
That was well above the current rate of having 5-10% of Hondas be electric cars, he said.
Another challenge is how to cut the production costs of electric cars to make them more affordable for consumers, Mr Hachigo said.
"By 2030, electric cars will mostly comprise HEVs and PHEVs, while BEVs and FCVs will account for fewer because those advanced-technology cars have to rely on related infrastructure such as electric-charging and hydrogen-fuel stations," he said.
"In Asia and Oceania, Honda has to work with the government in each country on those infrastructures as well as other OEM [original equipment manufacturer] suppliers."
Honda began developing hybrid technology vehicles in September 1999 -- the company has sold 13 hybrids models globally.
In Thailand, Honda assembles the Accord hybrid sedan at its Ayutthaya plant.
Pitak Pruittisarikorn, chief operating officer of Honda Automobile Thailand, said the company will apply for the BoI's EV investment promotion by the end of this year.
"The electric-car market will be born from three pillars -- technology, cost and infrastructure -- coming together, but in the Thai market, hybrid cars remain too expensive," Mr Pitak said.
Honda developed its flagship model, the Clarity, in PHEV and FCV forms. The BEV model will be introduced for commercial purposes next year in the US and China.
Gaku Nakanishi, president and chief executive of Honda's Thai unit, said the government scheme will help expand the sales volume of electric cars.