BMW reportedly is considering spending THB2bn on a new battery plant for plug-in hybrid vehicles in Thailand, according to local reports, citing industry minister Atchaka Sibunruang.

The automaker is understood to be in talks with the Thai government over incentives and other support packages for the project.

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The minister said construction of the plant would start in the middle of next year and it would help bring down the cost of hybrid vehicles in the country.

Thailand is BMW's largest market in south-east Asia and sales of its BMW and Mini brands approached 8,800 units last year. Mercedes-Benz leads the luxury segment, however, with 12,800 sales last year.

Hybrid sales have risen significantly, helped by taxes that incentivise fuel-efficiency. Luxury hybrids have benefited particularly from favourable taxation.

A statement from BMW on the investment was expected later.

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