Honda Motor is developing a small fuel-efficient small car for the global market and may build it in Thailand, reports AutoAsia.

Riding on the same platform at the Life minicar, the 1.0-litre model would be mainly targeted at Europe post-2008, after stricter emissions regulations come into force, according to the Nihon Keizai business newspaper. The European sales target would be in the region of 100,000 units, the paper added.
The Thai government's policy of offering big tax breaks and other incentives to companies producing car locally which have a low environmental impact is said to be a factor persuading Honda that Thailand may be the best production base.

If Bangkok's eco-car plan cannot formulated in time, other locationx would be looked at, including Suzuka, Japan and the UK, AutoAsia said.

If the subcompact were to be built in the Thailand, Honda is likely to build a second assembly plant there as its current factory is running at its 120,000-unit capacity, the report added.

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