The Thai government this week formally agreed to incentivise two major investments in the country's automotive sector, worth a combined THB16.78bn (US$505m), after delays of almost a year.
The Board of Investment (BoI) on Wednesday announced it had agreed to provide tax incentives for investments in hybrid vehicle production and related components by Nissan and Honda worth THB10.96bn and THB5.82bn respectively.
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Incentives for this type of investment generally include duty free import of related capital goods including manufacturing equipment, some key parts/materials for an initial period, and tax holidays of between five and 10 years.
The two automakers will join Toyota, Mercedes-Benz and BMW in receiving BoI investment privileges for local hybrid vehicle production.
Toyota is in the process of spending THB19bn on hybrid vehicle production in Thailand while Mercedes-Benz and BMW are putting in THB600m and THB700m respectively.
Nissan Motor plans to produce hybrid vehicles, automotive lithium-ion batteries and other dedicated parts at a factory in Bang Sao Thong district in Samut Prakan province while Honda also plans to produce hybrid vehicles and related parts, including batteries, at plants in Ayutthaya and Prachin Buri.
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