Nissan has confirmed that its planned THB5.5bn ($US155m) eco-car programme in Thailand remains on track despite the deepening crisis that is consuming the global car industry.

Toru Hasegawa, the new president of Siam Nissan Automobile, confirmed his company was pushing ahead with a new model that meets the Thai government’s eco-car criteria.

The programme will benefit from substantial incentives, including a five-year tax holiday. Production is scheduled to start in 2010.

With low production costs and cheap parts, Nissan hopes to gain a competitive edge by exporting the car to Japan. The model will be sold in Thailand and also exported across the ASEAN region. It will be smaller than the existing March (Micra), which many have speculated it will replace.

Ford has maintained until recently that its Fiesta programme remains on track for the end of 2009 but this model does not qualify for Thai government incentives.

Toyota has said it is reviewing its Thai small car production plans, as has Tata Motor, while Suzuki, Mitsubishi and Honda are understood to be considering postponing their investments.

The Thai vehicle market has been in decline for the last nine months and shows no sign of stabilising. Sales are widely forecast to drop for a fourth consecutive year in 2009 – by 15-20% compared with 2008. Sales fell 31% year on year in February and 30% in January.

Hasegawa said his company would be renamed Nissan Motor (Thailand) in April, bringing it in line with the automaker’s other overseas manufacturing units. Nissan has a 75% stake in the company, with the Siam Motor group holding the remaining 25%.

Tony Pugliese