RAYONG, Thailand — Suzuki Motor is building a new plant here this week, part of its program to produce a new small passenger car under the Thai government's eco-car program. The automaker is investing $225 million in the plant.
The Thai government is offering an eight-year corporate tax holiday provided the amount does not exceed the initial investment, as well as duty-free importation of machinery and of key components that are not available locally.
The global financial crisis forced Suzuki to delay construction of the plant, which will include engine assembly as well as a full body-shop. The government initially approved Suzuki's eco-car incentive package in December 2007, and production at the 138,000-unit-per-year plant originally had been scheduled to begin in 2010.
The plant will be operated by Suzuki Automobile Manufacturing Thailand, which is 100 percent owned by Suzuki Motor of Japan.
Production of the new small car, with a 1.3-liter engine, is now scheduled to start at the beginning of 2012, with first-year output expected to be around 10,000 units. Production will have to be ramped up to at least 100,000 units per year within five years of operation as part of the agreement.
Under the original agreement, around 80 percent of output will eventually be exported to other countries in the ASEAN region as well as Australia, New Zealand and Africa. To encourage local buying of "eco cars," the Thai government is offering favorable excise tax rates of 17 percent, compared with 30 percent on other passenger cars.
Inside Line says: Things are looking up for Suzuki's presence in Thailand. — Tony Pugliese, Correspondent
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