Thailand will spend THB3.42bn (US$113m) over the next three years to develop the country's car industry. The spending was approved by the cabinet this week and most of it will focus on developing a skilled workforce.

Thailand produced over 1.6m vehicles in 2010 and output could reach 3m in 2014, deputy government spokesman Marut Masayavanich told reporters.

"The major obstacle here is a shortage of skilled labour," he said after a cabinet meeting so most of the money - THB2.17bn between 2012 and 2014 - will be for skills training.

The rest will be spent developing what is described as an "integrated testing ground" to boost Thailand's competitiveness as a centre for car testing and to raise automobile and parts standards.