The Thai government is coming under increasing pressure to introduce a comprehensive framework of green automotive policies to take into account the rapidly growing global demand for electric and hybrid vehicle technology.

The Ministry of Industry’s current eco-car programme originally aimed to attract investment in small internal-combustion engined cars and is increasingly seen as outdated. The government is currently consulting with Japanese and European vehicle manufacturers as part of a broad-based policy review for its 2010-2015 automotive plan.

Under the eco-car programme, cars with a fuel consumption of 20km/litre incur local excise duties of 17% compared with the 30% applied to mainstream cars. Manufacturers also enjoy duty-free machinery imports and a five-year tax holiday, but must produce at least 100,000 cars annually within five years.

Six companies joined the programme, with Nissan taking the lead with production scheduled to begin in 2010. The other participants are Toyota, Mitsubishi, Honda, Suzuki and Tata Motors.

With vehicles sales currently depressed across most of the region, some manufacturers are struggling to identify markets for their Thai eco-cars. Tata Motors recently requested that the government relax the minimum output requirement.

Mitsubishi Motors has called for the Thai government to provide additional incentives for the production of electric motors and lithium-ion batteries, in an effort to promote production of electric vehicles. Mitsubishi launched the iMiev electric car in Japan last month which it would like to include in its eco-car plan provided there is sufficient demand.

There is growing market acceptance worldwide of electric drive and hybrid vehicle vehicles, and lithium-ion batteries and other related technology are increasing viewed as growth industries. Toyota recently launched the Camry and Prius hybrid models in the Asean region, though the limited tax incentives means that demand will be very limited.

Tony Pugliese