Mulally’s Bid to Qualify Fiesta for Thai Rebates Snubbed

Ford CEO Alan Mulally is rebuffed in his bid to include the auto maker in the Thai government’s tax-rebate program for first-time car buyers.

Mulally, visiting Thailand, raised the issue during a meeting with Prime Minister Yingluck Shinawatra. But the Bangkok Post says the new leader will not change the rules to include Ford’s Fiesta in the scheme.

Fiesta exceeds rebate plan’s engine-size limits.

Ford says the program’s limit on engine size to 1.5L could cost it as much as TB6.1 billion ($195.6 million) in lost revenue because its Fiesta 1.6L compact cannot compete with similar models eligible for the tax rebates.

Mulally told the premier the auto maker has a long history in Thailand and has continued investing during the past three years despite the nation’s political uncertainties.

Ford’s cumulative investment in Thailand since 1985 totals $2.5 billion.

Mulally gave Yingluck a letter stating 70% of the auto maker's local customers buy Fiesta models, and 40% of them are first-time buyers.

The Post says copies of the letter were sent to Deputy Prime Minister Kittiratt Na-Ranong, Finance Minister Thirachai Phuvanatnaranubala and officials at the board of investment and excise department.

However, Yingluck insisted the government would not change the maximum engine size for qualifying cars.

The newspaper quotes government spokeswoman Anuttama Amornwiwat as saying the premier told Mulally the finance ministry would seek other measures to maintain Ford’s investment in Thailand.

Ford ASEAN President Peter Fleet says he’s optimistic the auto maker will be able to persuade the government to amend the rules to include the Fiesta.

The Nation newspaper, meanwhile, says Thirachai is indicating government is reviewing its decision to exclude imported vehicles from the rebate program.

“We have to comply with a national-treatment principle of the World Trade Organization, so I have consulted with the commerce ministry to review the measures,” Thirachai says during a conference call with reporters in Washington.

The program, which started Sept. 16 and runs until Dec. 31, 2012, offers rebates of up to TB100,000 ($3,207) for first-time buyers of cars costing no more than TB1 million ($32,071).

Buyers must keep the vehicle for five years, but the government will issue the rebates at the end of the first year.