Saturday, September 22, 2007

Thailand's Honda says five-year target is 100,000 units

Honda says eco-car plan worth B6bn

ARANEE JAIIMSIN

Asian Honda Motor expects its eco-car initiative to lead to new investment of nearly six billion baht by the company and its suppliers to produce at least 100,000 units over the first five years, according to senior vice-chairman Adisak Rohitasune.

He said Honda had yet to finalise its investment budget for the eco-car programme, as the car's final design had yet to be concluded.

Honda recently announced a five-billion-baht budget to double its current production capacity project to 240,000 cars per year from 120,000 units now. The new investment excludes additional investment costs required under the eco-car programme.

The company has already submitted proposals to the Board of Investment for special investment privileges under the eco-car programme.

The government's specifications for eco-cars require an engine displacement not exceeding 1,300cc, with the fuel consumption rate at a maximum of one litre for 20 kilometres.

Mr Adisak said it may take more than a year from now to complete the design due to the global specifications required by the Thai government.

In addition, the price of each unit will be 500,000 baht maximum.

Honda would produce eco-cars to serve both domestic and export markets. However, the number of car sales for each market will depend on domestic demand.

Mr Adisak said the company would produce at least 100,000 eco-cars in five years to comply with the government's production volume requirement.

''Soaring oil prices and the global warming problem will help stimulate demands for our eco-cars throughout the world, certainly,'' he said.

The market share of small cars, for example the Honda City, Toyota Yaris, Honda Jazz and Toyota Vios, in Thailand is almost 60% of total passenger car volume at present, he said.

The eco-cars could also attract some lower-income market, which is seeking affordable cars but with full options, said Mr Adisak.

Only small cars and the sport utility vehicle (SUV) segment are still growing in the Thai market while sales volume of other segments has been stagnant.

He added that an eco-car had potential to create new markets in the global auto industry due to its unique specifications.

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