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Thailand Set To Become Regional Automotive Hub Thanks To Tax Breaks

by Mary Swire, Tax-News.com, Hong Kong

18 December 2003


Thailand’s policy of offering tax incentives to foreign auto-makers to encourage them to establish a presence in the country appears to be paying dividends after Ford announced on Tuesday the opening of a regional HQ in Bangkok.

The new operation known as Ford Services Thailand will primarily be responsible for overseeing Ford’s manufacturing operations in South East Asia as well as having a hand in marketing and finance.

"Thailand has increasingly played an important role as the regional automotive hub for Asean," said Michael McCarney, chairman of Ford Services Thailand which has been operational since November 1. Mr McCarney also praised the Thai government’s “strong leadership" in implementing AFTA, which allows for favourable tariff treatment on the trading of cars and parts within the Asean region.

However Ford is just one of many auto-makers lured to Thailand by government tax breaks in recent years. Mazda (a Ford affiliate) announced a $500 million investment plan in October for a regional manufacturing operation. Also the likes of Toyota, Isuzu, Mitsubishi and General Motors all have a presence in the country, and Thailand has become the second-largest producer of pick-up trucks behind the United States, according to the Wall Street Journal.

Attempting to capitalise on its success, the Thailand Board of Investment is planning to restructure the country’s excise-tax regime and offer more tax incentives to firms that encourage the development of domestic supporting industries.


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