Watch out, Japan: there's a new player in town gunning for your green title. Dubbed the "Detroit of Asia" in recent years for its efforts to promote itself as a regional automotive powerhouse, Thailand is moving forward with an ambitious plan to burnish its green credentials by mass-producing a new fleet of "eco-cars."
The project aims to encourage foreign and domestic automakers to develop cheap cars that minimize fuel consumption and lower the production of exhaust emissions. The government hopes to accomplish this by issuing a raft of favorable tax incentives for carmakers that meet stringent standards of fuel efficiency, emissions and safety. The cars would have to comply with the "Euro 4" emission specifications and impact-protection standards set by the UN Economic Commission for Europe and meet a maximum fuel consumption standard of 5 liters per 100 km. In addition, carmakers would have to invest at least $145 million in their assembly lines and in engine and parts production, build at least 100,000 such eco-cars by the fifth year of production and make at least 80% of the parts domestically.
Acutely aware of the car industry's recent sales plunge and weaker domestic demand, government officials are hoping this new initiative will boost sales and new investment once again and discourage carmakers from scaling back their production by shifting to a new market. So far the plan has been a mixed bag: while some auto producers have expressed concerns over cannibalizing sales of their other well-established models (particularly from the pick-up truck sector, which remains the most popular line of vehicles in Thailand), other companies eager to gain a toehold in the market have shown interest in starting production as soon as possible.
Once the new tax regime comes into effect in late 2009, carmakers who've had their models pre-approved for production by the Thai government will be able to press ahead with their plans to build a new fleet of eco-cars. They are already expecting to face stiff competition from China's nascent car industry, which will begin exporting cheap cars manufactured by Chery Automobile into the country and has plans to broaden its market throughout the Association of South-East Asian Nations (ASEAN). Boasting a price range of $9,280 to $11,600 and high fuel efficiency, the Chery QQ model will be a tough nut to crack and will undoubtedly force other automakers to "green" their production and assembly lines that much more to effectively compete.
Via ::Thailand's eco-drive (magazine)
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