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By: Bangkokpost.com Published: 15/07/2009 at 08:52 PM Manufacturers of eco-cars may be awarded a two-year tariff reduction of as much as 90% on imported parts, as Thailand is striving to revive the sluggish automotive industry. The goal is to attract carmakers to turn the country into a major production base for fuel-efficient and environmentally friendly compact vehicles.

The tax privileges would apply to automotive parts that are not produced locally, BoI secretary-general Atchaka Brimble said on Wednesday after a meeting of the investment agency chaired by Prime Minister Abhisit Vejjajiva.

"We want to support manufacturers of eco-cars and encourage them to develop their production bases in Thailand,'' she said, adding that the tariff reduction would lower the production cost by about 100,000 baht per unit.

"The measure would help strengthen eco-car producers to provide lower costs so they would become competitive when exporting the models to overseas markets.''

According to Mrs Atchaka, Nissan Motor is expected to start making eco-cars in Thailand early next year. The Japanese automaker has already imported the machinery while others are in the process of doing so.

The BoI has granted investment privileges to six car companies, including Nissan, which have expressed interest in making eco-cars in Thailand.

The investment promotion agency also agreed on Wednesday to offer the maximum tax privileges to every industry operating in Pattani, Yala and Narathiwat, the three southernmost provinces that have been suffering economically from renewed sectarian violence, now in its eighth year.

Previously, only agricultural projects could enjoy the maximum incentives. The measures will be offered to projects that apply to the BoI until December 2012.

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