German carmaker Volkswagen AG (VOWG_p.DE) has applied to set up its first plant in Thailand to help narrow the gap with Toyota Motor Corp (7203.T), Bloomberg reported late Tuesday citing people familiar with the matter.
The manufacturer is seeking to participate in a government program offering tax exemptions for automakers investing at least 6.5 billion Thai baht ($200 million) in local manufacturing, the media service ,was pending.
Carmakers had until March 31 to apply for the program which includes vehicle assembly, components and engine production, according to a ministry statement from October.
People told Bloomberg that Volkswagen has not made a final decision on producing vehicles in Thailand as the exact terms and conditions may still change.
Volkswagen could not be reached for a comment outside of normal business hours.
Volkswagen sees a "strong market opportunity" in southeast Asia, Hans Dieter Poetsch, chief financial officer of the multinational automaker said in a presentation published on the company's website last week.
(Reporting by Aashika Jain in Bangalore; Editing by Richard Chang)