Tata Files Complaint Over Thai Rebate Policy That Excludes Imports

Tata Motor Thailand files a complaint with the Indian Embassy in Bangkok, saying Thailand's first-time car buyer program breaches trade rules by discriminating against imported vehicles.

The Indian auto maker says it will cancel plans to import the low-priced Nano if changes are not made.

Tata threatens to scrap Nano imports to Thailand if rebate program isn’t expanded.

The Bangkok Post reports other importers also are expected to complain through diplomatic channels after Thai Finance Ministry officials dismissed their concerns about the “impractical and unfair nature” of the scheme at a meeting with leasing and automotive firms.

Trade Negotiations Department head Srirat Rastapana says the first-car tax-rebate program does not contravene World Trade Organization regulations, as it is aimed at assisting the public and is not a subsidy.

Tata fears the rebates could affect sales of the pickup trucks it sells in Thailand and the Nano car it plans to import from India later this year.

“Tata does not object to the program, but the implementation will create unfair trade competition, as only locally built vehicles are entitled for the tax rebate, which is as high as TB100,000 ($3,278),” an unnamed senior executive tells the newspaper.

The government says the rebates are not meant to benefit any particular auto maker because they still pay the full tax. But Tata argues consumers can see the difference in prices between locally built models that qualify for rebates and imports that do not.

Tata Thailand plans to import the Nano, the world's lowest-priced small car, by the end of this year and is aiming for sales of 6,000 units next year.

The Nano will have a 55-cu.-in. (0.9L) engine and cost about TB200,000 ($6,556) if it qualifies for the rebate. It will be taxed at the normal 25% rate for its category.

The newspaper quotes the Tata executive as saying if Thailand issues rebates only on locally built vehicles, the auto maker will drop plans to import the Nano rather than try to market a product that is not price-competitive.

Hyundai Thailand also is reviewing its imports of its i-10 subcompact from South Korea, and its executives have met with the South Korean ambassador to ask for support.

“Rebates for only local vehicles would place the imported ones at a disadvantage, and we consider that unfair treatment," an unnamed importer executive is quoted as saying.