Volkswagen’s executives will meet Industry Minister Suwit Khunkitti and the Board of Investment (BoI) by the end of the month to finalise details on its proposed eco-car manufacturing project, according to an Industry Ministry source cited in a local newspaper report.

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The Nation newspaper reported that Volkswagen’s project has yet to gain approval because the BoI required further details for the ‘huge’ investment project.


“Volkswagen’s project will need more investment than other companies because it has to invest in a large package including parts,” the source said.


Thailand is expected to produce 800,000 units annually of energy-efficient ‘eco-cars’ according to industry sources.


The BoI to date has approved eco-car investment proposals by Honda, Suzuki and Nissan of Japan for annual production of about 120,000 units each. Early this month the agency also approved plans for about 100,000 units a year each by Mitsubishi, which aims to export 80% of its output, India’s Tata Motors and Toyota of Japan.

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Volkswagen had also confirmed its intention to produce a small car in Thailand with a total investment of 27 billion baht.


The German carmaker is considering Thailand after failing to form a partnership with Proton, the Malaysian national car company.


Under the eco-car investment promotion scheme, the excise tax on the cars would be only 17% compared to the normal rate of 30%.


To be eligible for tax incentives, the cars must have engine sizes of no more than 1,400cc, must comply with the Euro 4 emission standards and must consume no more than one litre of fuel for every 20 kilometres.