Bangkok - Thailand will provide tax privileges to Western manufacturers of vehicles capable of using E85 - fuel with up to 85 per cent ethanol - despite opposition to the plan from Japanese car makers, the prime minister said Sunday. Prime Minister Samak Sundaravej, addressing his weekly "Talking Samak Style" TV program, 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.
Several US and European auto manufacturers already produce E85-compatible models, but Japanese manufacturers are expected to come out with their E80-compatible models for the export market only after two years.
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.
In a bid to reduce its dependency on imported fuels, Thailand recently decided to promote the production of E85, using locally produced ethanol from various agricultural commodities such as sugar and tapioca.
Samak said he decided to support the swift importation of E85-compatible vehicles because local ethanol refineries were producing excessive amounts of ethanol.
He added that car manufacturers would be required to invest in local assembly operations for their E85 models within 18 months.
