Japan's Toyota plans Thai "eco" car production

BANGKOK, Sept 12 (Reuters) - Toyota Motor Corp. (7203.T), the world's biggest automaker, plans to produce small, fuel-efficient cars at its Thai plant, a Thai executive said on Wednesday. The company would submit its application for the project by the end of November, Ninnart Chaithirapinyo, vice chairman of Toyota Motor Thailand Co. Ltd, told reporters.

"Toyota should submit the application by November 30 as set by BOI," he said of the Board of Investment. "We are studying carefully which model will meet customer demand."

Toyota would use existing capacity at a plant to produce the new small cars and had not decided on how much it would spend on the project, he said. In June, the BOI approved investment privileges for the manufacturing of eco cars with a minimum investment of 5 billion baht and production of 400,000 over four years.

Excise tax on such cars would be cut by nearly half to 17 percent from October 2009 and manufacturers would get corporate income tax exemption for eight years and be allowed to import related machinery duty free.

Honda Motor Co. Ltd. (7267.T) and Ford Motor Co (F.N), which also have plantss in Thailand, are also considering manufacturing such small cars.

The Thai auto industry has faced a steep drop in auto output growth since 2006 as a long political crisis dented domestic demand and export growth slowed.

The industry's domestic sales fell 10.8 percent to 343,672 in the first seven months of this year while exports rose about 19.45 percent in the period to 363,315.

Toyota maintained its 2007 production target of about 500,000 with 280,000 for domestic and the rest for export, Ninnart said.

($1 = 34.10 Baht)

((Reporting by Viparat Jantraprap, editing by Michael Battye; e-mail: bangkok.newsroom@reuters.com; Reuters Messaging viparat.jantraprapaweth.reuters.com@reuters.net;+662 6489733)) Keywords: THAILAND TOYOTA/ECO CAR

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