Honda plans to expand its production facility in Thailand for a new compact car, with an initial investment of 6.6 billion baht, Vatchara Panchet, the industry ministry’s deputy minister reportedly said on Friday.
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According to Dow Jones, Honda will initially produce 100,000 units of fuel-efficient cars, which would conform to European Union emission standards, Vatchara told reporters after a meeting between Thai prime minister Thaksin Shinawatra and Honda Motor president & chief executive Takeo Fukui.
The compact cars are expected to be ready for sale in 2007, he reportedly said.
“Honda is interested (in using) Thailand as a production base for eco-cars,” Vatchara told Dow Jones, which added that most of the products will be shipped to Europe with only around 10% of the Thai-built cars sold locally.
The car would be around priced aroundT HB350,000 a unit, around 30% lower than average medium-sized Japanese cars sold in Thailand, Vatchara reportedly said.
The report said Vatchara added that Honda Motor will apply for tax incentives on this investment.
Dow Jones noted that, in 2003, Honda Automobile (Thailand) completed its production capacity expansion to 120,000 units a year, from 70,000 units previously while Honda Motor earlier this year said its car sales in Thailand are expected to reach 78,000 units, up 13% on year.
Just-auto believes the new car will be a replacement for the current Honda Jazz (Fit) hatchback launched in Europe in 2002, which will be due for replacement around 2007. Sedan versions are already built in Thailand and shipped to other Asian markets including Japan.
