Suzuki to build car plant in Thailand

SUZUKI Motor Corporation has become the latest car manufacturer to commit to building a production plant in Thailand, taking advantage of Thai government tax incentives under its so-called “eco-car project”.

Suzuki announced last week that it would commit ¥20 billion ($A251 million) to the construction of a new plant in Rayong province, with production of a still-to-be-specified 1.3-litre compact car to begin in March 2012.

Suzuki expects to build 10,000 cars by the end of that first year.

A likely candidate for production at the Thai plant is the Splash, a five-door, five-seat hatch slightly larger than the Indian-built, four-seat Alto which went on sale in Australia in August. Suzuki Australia has confirmed it wants the Splash, but the problem to date has been European sales demand that has stretched production at the plant in Hungary since its launch at the Frankfurt motor show.

In India, it is called the Ritz.

Under Thailand’s eco-car program, global manufacturers are enticed with cuts of up to 90 per cent in import tariffs on components and materials used for producing the vehicles, which must meet certain criteria.

Left: Suzuki Alto. Below: Suzuki Swift.

These include petrol engine displacement of 1300cc or lower (1400cc for diesel), compliance with the Euro 4 emissions standard, maximum CO2 emissions of 120g/km, and maximum fuel consumption of 5L/100km.

The Thai government also offers a corporate tax exemption for at least five years if annual production volume of cars under the program reaches 100,000 within the first five years of operations.

The new plant could allow Suzuki Australia to import vehicles from Thailand rather than Japan or, in the case of the Alto light car, India, which is a more expensive nation from which to source cars.

Thailand also has a beneficial free-trade agreement in place with Australia, which assists a number of car companies in Australia.