“Green” tax breaks were introduced in Thailand last year. This is an effort of the nation as the world’s largest manufacturer of light pickups to tuck the title in the years to come. Annually, Thailand churns out 900,000 one-tonne trucks. The figure is three-fourths of global output.

The government is threatened by escalating oil prices and global warming concerns that could result in truck sales doldrums. This scenario could put a dent to Thai economy because shoppers are expected to shift to fuel-efficient compact cars. These reasons prompted the Thai government to offer incentives for the manufacturer of “eco-cars” that meet European emission standards.

"First-time car owners, and especially motorcyclists who want to become car owners, are cost-conscious consumers," said Surapong Paisitpatnapong, spokesman for the Federation of Thai Industries' automotive club. "Investments in eco-car production will help grow this new segment of the country's domestic auto market while increasing exports.”

By far, seven automakers have proposed eco-car projects to Thailand's Board of Investment. The automakers include Toyota Motor Corp., Volkswagen AG, and Tata Motors Surapong said four proposals have already been approved.

Also, Honda Motor Co. intends to invest $214 million to assemble eco-cars while manufacturing engines and parts in Thailand. Suzuki Motors, meanwhile, will invest $303.658 million to build a new factory in central Thailand. Approximately 80 percent of cars produces will be for export. Nissan Motors Co. also will invest $177 million to build 120,000 units annually. The output is also mainly allotted for export.

"Eco-cars are going to be hot in Thailand's auto market. The lower prices for these minicars, along with high oil prices, will drive up the demand," said Nongnapat Wilepana, a Nissan dealer in Bangkok.

AFP reported that under the scheme, the companies will not have to pay corporate income taxes on their investments for eight years, and duties on imported machinery will be waived.

“Thailand's main worry is that its auto industry depends entirely on foreign companies, since the kingdom has no national automaker,” Surapong noted. “That means the country will have to keep wooing automakers with attractive offers in the future to deter them from looking for better deals for their factories in other countries.”

The planned assembly facility will be built at AutoAlliance Thailand, a joint venture between the two automakers. Today, a pickup truck assembly plant is already operational and is now producing large vehicles at the said joint venture in Thailand. The car assembly plant will be built on the same site as the existing facility.

According to Mazda's newsletter, the car assembly plant will maximize manufacturing efficiency and flexibility by integrating a production line from stamping to the final assembly. Aside from that streamlining of the production process, the car assembly plant will be using Mazda's Three Layer Wet Paint System.

The Three Layer Wet Paint System will be used not only in painting the cars assembled but also in finished pickup trucks. Apart from its space-saving attribute, the said system also reduces the amount of VOC and carbon dioxide emitted during the painting process and at the same time improves paint quality.

"The construction of the new passenger car plant at AAT is one of the major strategic moves we are making to raise global retail sales to 1.6 million units under our mid-term Mazda Advancement Plan," said Imaki.

"The AAT plant is an outstanding symbol of our deepening synergies with Ford. Mazda will make maximum use of the new passenger car plant to enhance our product lineup in Thailand and for other export markets. In line with the new plant construction, we expect even greater direct and indirect contributions to the Thai economy," said Imaki.

Today, the pickup truck assembly facility at AutoAlliance Thailand produces 175,000 units annually. Upon completion of the car assembly facility, the AAT's annual production capacity will reach 265,000 units per year. That number includes complete knockdown kits.

The expansion of AAT will help not only Ford and Mazda but also the economy of Thailand. The AutoAlliance purchases about 90 percent from a Thai-based auto parts manufacturer. With the new car assembly facility in place in the near future, more components will be bought from Thai auto components producer. This means that new jobs will be created not only in the car assembly plant but also on the auto parts manufacturing sector. It is anticipated that 2,000 new jobs will be created with the car assembly facility. This is apart from the thousands of new jobs that will be created in related industries.