BMW AG reportedly is considering making Thailand its Asian manufacturing base for electrified vehicles and is seeking tax incentives to do so.

Industry Minister Chaiwuti Bannawat met executives of the German auto maker at its Munich headquarters and later told the Bangkok Post BMW has asked whether Thailand can offer tax breaks for cars that are even more environmentally friendly than what it classifies as eco-cars.

“I will discuss this issue with the ministries of finance and energy, as well as the Board of Investment,” Chaiwuti says. “Hopefully, we can come up with something to update BMW when I come to Germany again late this year.”

Thailand gives tax breaks to small fuel-efficient vehicles, such as the eco-cars, based on their engine size, but Chaiwuti says BMW wants the tax scheme to better embrace hybrids that would have standard-size engines but achieve better fuel economy.

He says BMW is planning to assemble more models at its Rayong factory to better use its capacity, a move confirmed by Guenther Seemann, BMW's vice-president-Asia/Pacific and South African regions.

The plant has single-shift capacity for 6,000 vehicles per year and makes the 3-, 5- and 7-Series cars and X3 SUV.

BMW plans to raise production to 3,000 units this year, up from last year's 2,000.

Seemann tells the newspaper the factory was built to serve the entire Southeast Asia region and reap the benefits of the regional integration under the Association of Southeast Asian Nations Free Trade Area agreement.

“For us, the Thai factory is an important component for our growth in Asia,” he says.