Suzuki Motor Corp. breaks ground on a ¥20 billion ($231.2 million), 100,000-unit assembly plant in Thailand for its eco-car, with production scheduled to start in March 2012.
Suzuki received Thai government approval for its eco-car project in December 2007, but then put its plans on hold.
With the global economy improving, Suzuki held its groundbreaking ceremony today at the Hemaraj Eastern Seaboard Industrial Estate in Rayong province.
The government is offering up to a 90% reduction in import duties for foreign parts and materials for auto makers meeting requirements of the eco-car program.
Suzuki’s 699,654-sq.-ft. (650,000-sq.-m) plant will have facilities for stamping, welding, painting, assembly and engine production.
The company says it also is reorganizing its Thai automobile sales operations. It now markets its vehicles through its Suzuki Automobile (Thailand) Co. Ltd. sales subsidiary, but plans to gradually shift those operations to its local production company, Suzuki Automobile Mfg. (Thailand), which was established in April 2008.
The plant, employing 800 workers, will produce 10,000 units by the end of its first year, expanding to 100,000 units in the fifth year.
To win the eco-car tax concessions, an auto maker must spend at least TB5 billion ($150.4 million) to produce a vehicle capable of 47 mpg (5 L/100 km). The vehicle has to meet Euro 4 emissions standards and UN Economic Commission safety regulations.
Engines must be smaller than 1.3L for gasoline powerplants and 1.4L for diesels. Thai manufacturing is required for at least four of the five major engine parts, including cylinder blocks, cylinder heads, crankshafts, camshafts and connecting rods.
Auto makers have to reach output of 100,000 units a year by the fifth year of production.