The government of Thailand has increased ‘eco-car’ tax incentives to attract carmakers to invest in the production of small car manufacturing there.

The state-run Board of Investment (BOI) has said car manufacturers investing in eco-car projects would enjoy cuts of up to 90% in import tariffs for foreign car parts and material inputs.

The parts entitled to the low tariff must not be available from local producers, it said in a statement.

“The BOI incentive aims to encourage investors to move their manufacturing base to Thailand,” Industry Minister Chanchai Chairungruang said in a statement issued by the BOI.

“It also aims to expand investment opportunities in the automotive sector, which will benefit the automobile parts industries in Thailand in the long term,” he said.

According to the BOI, eco-cars are passenger cars that must meet safety, low fuel consumption and Euro 4 emission standards.

Several major OEMs are interested in setting up eco-car manufacturing programmes in Thailand including Toyota, Mitsubishi, Nissan and Honda.