Mitsubishi Thailand to Expand Assembly Plant

Mitsubishi Motors (Thailand) Co. Ltd. has acquired 79 acres (32 ha) of land next to its assembly plant in Chon Buri to expand production.

The plant’s annual capacity of 200,000 vehicles is not meeting rising demand, especially for Triton pickup trucks that are shipped to more than 140 countries, an unnamed company official tells the Bangkok Post.

The official says the expansion also will allow the production of small, fuel-efficient cars under the Thai government’s eco-car project. Mitsubishi is due to submit its proposal for its participation in the project to the Board of Investment within days, he says.

However, Mitsubishi is concerned the engine size of its proposed eco-cars will not meet the requirements that would allow it to qualify for the lower tax rate offered by the project.

The proposed engine size of Mitsubishi’s gasoline-powered eco-cars is slightly more than the required engine size of up to 1.3L.

‘’The condition the excise department set for the eco-car project to qualify for the tax privilege is rather strict, even though (our) proposed engine size is a little bit bigger,’’ the official is quoted as saying.

Thailand’s excise tax on eco-cars will be cut from 30% to 17% in October 2009. Under the program, a diesel-powered car cannot have an engine larger than 1.4L. Vehicles also must have a fuel economy of 47 mpg (5 L/100 km) and comply with Euro 4 emissions standards.

Another condition requires each auto maker to invest at least 5 billion baht ($160 million) in the project.

Siam Nissan Automobile Co. Ltd. and Suzuki Automobile (Thailand) Co. Ltd. also are expected to propose their eco-car projects to the Board of Investment in the next few days.

Asian Honda Motor Co. Ltd. already has received board approval for its TB6.7 billion ($215 million) eco-car project.