Thailand to provide tax benefits to E85 model vehicle manufacturers

Western manufacturers of vehicles capable of using E85 – fuel with up to 85 per cent ethanol – will get tax benefits in Thailand despite opposition to the plan from Japanese car makers.

Prime Minister Samak Sundaravej, addressing his weekly “Talking Samak Style” TV program the week before, said the government decided to offer tax breaks for imported E85-compatible vehicles despite a request from Japanese auto manufacturers to delay the plan by two years.

Japan is opposing this plan because Japan will be able to come out with its E80-compatible models for exports only after two years where as several US and European auto manufacturers already produce E85-compatible models.

The Thai automobile market is dominated by Japanese manufacturers, nearly all of whom have set up assembly and manufacturing plants in Thailand to avoid high import taxes on completely built-up vehicles. Thailand has decided to promote the production of E85, using locally produced ethanol from various agricultural commodities such as sugar and tapioca so as to reduce its dependency on imported fuels.