ECO Technology for Future Vehicles Mr. Vallop Tiasiri Mr. Vallop Tiasiri President of Thailand Automotive Institute President of Thailand Automotive Institute 29 March 2010 29 March 2010 th International Conference of Automotive Engineering at The 6 th at The 6 International Conference of Automotive Engineering
Direction of World Automotive Development “Sustainable “ Sustainable Mobility Mobility” ” � Zero Emission ; Clean � Renewable Energy; Save � Vehicle Safety; Security (3) Source: BOI as of March, 09 Challenges in Future Challenges in Future Global mean temperatures are rising faster with time 50 Year 0.128 ± 0.026 100 Year 0.074 ± 0.018 Source : The Intergovernmental Panel on Climate Change (IPCC) CO 2 CO 2 emission from transportation is a emission from transportation is a substantial portion of total greenhouse gas substantial portion of total greenhouse gas
Automotive Technology Trend Automotive Technology Trend 2020 Interim Plan Electric Motor Driven Motor Driven raising the Hydrogen Efficiency of cars, like hybrid Vehicle vehicles and Technology with electrical vehicles Biomass-to-liquid promoting alternative fuels Hybrid Electric Driven Gas-to-Liquid Optimization of I nternal Combustion Engine Low concentration Bio-Fuel I ncreasing Efficiency Natural Gas Of Engines Petroleum Ethanol Current Government Policy on Auto Industry Current Government Policy on Auto Industry Favorable tax structure for energy saving and � alternative vehicles Promote fuel efficiency vehicles � � Global liberalization trade policy Promote harmonization of technical regulations; � ECE Promote the investment of big bike and � Passenger Car by Board of Investment
Thai Automobile Tax Structure Thai Automobile Tax Structure * Energy Saving and Alternative Fuel Vehicles Passenger cars Duty and taxes Duty and taxes Import duty 80% Import duty 40-80% CEPT (ASEAN) 5% CEPT (ASEAN) 5% Excise tax Excise tax - Hybrid, Electric, Fuel Cell 10% - not exceeding 2,000 cc. 30% - Eco car 17% - 2,001-2,500 cc. 35% - NGV 20% - 2,501-3,000 cc. 40% - E20 25% - More than 3,000 cc. 50% Municipal tax 10% Municipal tax 10% of Excise Tax of Excise Tax VAT 7% VAT 7% * Energy Saving and Environmental Tax Incentive Promote Fuel Efficient Vehicles Promote Fuel Efficient Vehicles Eco-Car - Quality Product Quality Product compatible with compatible with - environment, fuel efficiency and and environment, fuel efficiency Project safety , in line with global trend safety , in line with global trend • Fuel consumption : < 5 litres per 100 km • Car emissions : Euro 4 or higher, with CO2 emissions < 120 grams per km • Safety : full front- and side-impact protection based on UNECE specifications
nd “ ” � � ECO car 2 nd 2 “Global Niche Global Niche” ECO car “ “Promote I nvestment Promotion for ECO car Promote I nvestment Promotion for ECO car” ” Emission Standard: EURO I V & CO 2 < = 120g/ km. Classification of All The Lowest Energy Saving: Energy Saving: (3,946) Car Models Combined Currently on sales in Fuel Europe (Nov 2004) Consumption 5 liter/ 100 km. (Liters/100km) The Best 3.4 Top 5% 5.0 incl. Hybrid, Alter. Fuel Top 10% 5.5 Top 15% 5.8 Top 20% 6.1 Top 25% 6.5 Top 30% 6.9 Top 40% 7.4 Median 7.9 Crash Safety: Top 60% 8.5 Top 70% 9.1 UN ECE R94&95 Top 80% 9.8 Top 90% 10.9 The Worst 25.0 Source: Vehicle Certification Agency, UK Rationale Behind the Rationale Behind the “ ECO Car Policy ECO Car Policy ” ” “ � Environment & Energy Conservation � Global Warming � Social Responsibility � Social & Economic Development, and Urbanization � Sustainable Mobility � Thailand Automotive I ndustry � Suitability � Economy of Scale
ECO Car ECO Car ’ ’s Concept s Concept • New New “ “ ECO ECOlogical friendly logical friendly car car • for modern society ” ” for modern society • “…a radical change in vehicle design as well as environmentally friendly transportation, and away from the belief that small cars are basic and less safe…” [Toyota] Common Project Common Project Characteristics Characteristics � Production Capacity of 100,000 to 150,000 units/ yr � Brand New Vehicles � Engine Parts Production � Global parts production network � Local value added 50-80 % � Domestic sale of ECO cars � Export of CBU and/ or CKD
New Eco- -Car Promotion Car Promotion New Eco Eco-cars � No more than 5 litres/100 km Emissions compliant with Euro4 specification or � higher � Carbon dioxide emissions no more than 120 gm/km Full front and side impact protection based on � UNECE specifications Investment Incentives Exemption of import duties on machinery � � 8-year corporate income tax exemption Manufacture of Automobile Parts for Eco-Cars � Manufacture of automobile parts for international-standard eco-cars � Exempt from import duty on machinery, regardless of zone � Corporate income tax exemption for not more than eight years, regardless of zone � 90 percent reduction of import duties on raw materials and finished auto parts for 2 years
Thailand Eco-car’s Situation � 6 projects approved � Total capital investment: Bt 69 billion � Total production capacity: 658,000 units/year � Total exports (volume): 419,000 units � Total exports (value): Bt 113 billion � Total employment: 11,000 workers Eco Car Investment Budget Capacity Company Million Baht Units/Year Honda 120,000 6,700 Suzuki 138,000 9,500 Nissan 120,000 5,500 Toyota 100,000 6,600 Mitsubishi 107,000 7,700 TATA 100,000 7,300
Conclusion Conclusion � Efficient utilization of the energy resources by using the right technology � Offering and implementing technologies for individual requirements � Ensure automotive industry development policies are consistent and complimentary � Provide enough lead-time to ensure effective implementation New Automotive Policy � On June 10, 2009 the Board of Investment announced it would promote large-scale investments for vehicles not yet produced in Thailand that use new technology � The policy is designed to attract international automakers looking to restructure by relocating production facilities overseas � This policy is certain to expand the range of opportunities for manufacturers of automotive parts and components
New Automotive Policy (Criteria) � Investment in new assembly line � Minimum investment of Bt 10 billion, exclusive of land cost and working capital � Actual production of at least 100,000 vehicles per annum in any year during the first five years of operation � The project must include the production of a new model that has never been manufactured in Thailand and the production of automobiles equipped with high-technology systems (e.g. hybrid drive, brake energy regeneration, electronic stability control, etc.), as approved by the Board of Investment � Must submit investment plan/sourcing plan for parts and component to the Board of Investment for approval � Applications must be submitted within 2010 New Automotive Policy (Incentives) � Corporate Income Tax Holiday � 5-year corporate income tax holiday for projects with investment of at least Bt 10 billion excluding land cost and working capital � 6-year corporate income tax holiday for projects with investment of at least Bt 15 billion excluding land cost and working capital � One additional year of corporate income tax holiday for projects submitted by the end of 2009 � Exemption of import duties on machinery, regardless of zone Note: Corporate income tax exemption may not exceed capital investment, not including land and working capital
Manufacture of Hi-Tech Vehicle Parts � Projects in high-tech vehicle parts and component manufacturing are Priority Activities � Exempt from machinery import duties, regardless of zone � Exempt from corporate income tax for 8 years, regardless of zone � Examples of activities eligible: � Electronic Fuel Injection Systems � ABS Brake Systems � Substrates for Catalytic Converters � NGV Parts � Molds/Dies � Automatic transmissions � Continuously variable transmissions (CVT) � Traction motors for automobiles (e.g. hybrid car, fuel cell) � Electronic stability control (ESC) � Regenerative braking systems Manufacture of Fuel Cells � Projects that manufacture fuel cells are classified as an activity of special importance and benefit to the country � As such, they are eligible for the following incentives: � Exempt from machinery import duties, regardless of zone � Exempt from corporate income tax for 8 years, regardless of zone � Projects are not subject to the corporate income tax exemption cap specified in paragraph 2 of section 31 of the Investment Promotion Act
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