Mazda said it plans to begin production of a new small car in Thailand under the government’s ‘eco-car’ programme in early November, with local sales scheduled to start in early 2015.

The automaker’s application to join the second phase of the Thai government’s eco-car scheme was approved in July 2014 and the company has been quick to implement its investment programme.

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Mazda has committed THB9.73bn (US$299m) over the next five years to produce 158,000 small cars per year, a large proportion of which must be exported. 

A new, THB8.19bn transmission plant is scheduled to begin operations in Chonburi next year, with an eventual production capacity of 400,000 units a year.

Eco cars have to meet key specifications laid out by the Thai government, including a maximum fuel consumption of one-litre per 20km (12 miles). They enjoy reduced excise taxes when sold locally and investors enjoy generous tax concessions. 

Ten vehicle manufacturers have joined the eco-car programme since the first phase was launched in 2007, for a combined annual capacity of 1.58m units by 2020. This includes 753,000 units of annual capacity from the first phase of the programme.

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Mazda currently operates a joint venture with Ford in Rayong called AutoAlliance (Thailand), which has an annual production capacity of 140,000 one-tonne pickup trucks and 100,000 passenger cars – shared equally between the partners.

Ford also joined the second phase of the eco-car programme with a commitment to invest THB18.2bn in an additional 180,000-unit facility in Rayong.