Honda looks at hybrid car plant in Thailand

Honda looks at hybrid car plant in Thailand

Japan's Honda Motor is mulling a plan to build its hybrid car in Thailand, its first outside Japan, if the government provides tax incentives, the automakers's regional office said on Tuesday.

Asian Honda, the carmaker's Bangkok-based Asia-Pacific headquarters, said increasing demand for hybrid cars driven by surging global oil prices has prompted Honda to look for more production plants outside Japan.

"We are looking for a further development of tax benefits (in Thailand) at this stage," Asian Honda's spokeswoman told AFP on Tuesday.

Because producing the hybrid passenger car is more expensive than conventional cars, Honda's executives have said making it outside of Japan is difficult.

Toyota Motor, Japan's largest auto maker, said recently it would start its first overseas production of hybrid cars in China this year.

Honda's Bangkok-based spokeswoman cited local availability of automotive parts suppliers as a key reason for Honda's interest for further expansion in Thailand.

The automaker already makes passenger sedans and a "multipurpose vehicle" here.

Honda cars made in Thailand could enjoy a high ratio of local content enabling the carmaker to ship its hybrid vehicles overseas at a competitive cost, the spokeswoman said.

Honda is Thailand's fourth largest exporter in Thailand behind Toyota, Mitsubishi Motor and Auto Alliance, a joint venture between Ford Motor of the US and Japan's Mazda Corp.

The firm recently revealed a plan to set up a 60 million research and development center in Thailand expected to become operational in 2007.-- AFP