MB Tech, a research and development and auto parts testing unit of Mercedes Benz, plans to establish its regional office in Thailand to serve its subsidiaries in Asia and supplement Thailand’s bid to become the regional automobile hub, the Bangkok Post reported, citing vice minister for industry Vatchara Panchet.

The company is now preparing to apply for promotional privileges from the Board of Investment, he reportedly said yesterday.

With initial capital of 15 million baht, the company will help upgrade the potential and competitiveness of Thai parts manufacturers, especially through its modern technologies and research and development, by improving production efficiency and cutting production costs.

The planned entry of MB Tech was the result of a recent visit to Germany by senior industrial officials who discussed business opportunities with many car firms there.

Vatchara, a former senior executive of the now-defunct MMC Sittipol Co, the local manufacturer and distributor of Mitsubishi vehicles, told the Bangkok Post that MB Tech would also lend support to the Thai-German Institute for a project to develop moulds for auto parts.

The project would not only help substitute imports but also improve know-how for Thai parts manufacturers, helping turn them into world-class manufacturers.

Another German luxury car manufacturer, BMW, was also persuaded to establish its auto design centre in Thailand, with facilities ranging from design unit to modern assembly of automobiles.

BMW is keen to establish the centre in Asia but has not yet chosen the country. Besides Thailand, Japan, Taiwan and Malaysia are also lobbying hard for the deal.

Meanwhile, industry minister Pinit Charusombat reportedly said his ministry had outlined a policy to further promote auto parts manufacturing by offering support in the form of credit lines extended by state-sponsored financial institutions such as the SME Bank.

As part of the policy to turn Thailand into the ‘Detroit of Asia’ by 2010, he said about one million vehicles worth about 500 billion baht would be produced in 2006 and auto parts exports that year would reach 200 billion baht in value, the Bangkok Post said.