Japanese carmaker Honda Automobile Thailand is confident it can succeed with the sales of its new eco-cars, after failing to meet production requirements in the scheme's first phase.
The government launched two phases of the eco-car scheme in 2007 and 2013 to attract massive investment from manufacturers to produce eco-friendlier passenger cars.
The phases saw participation from six eco-car manufacturers, with five for the first phase: Nissan, Honda, Mitsubishi, Suzuki and Toyota.
Five car makers also applied for the 2013 second phase, including newcomer Mazda.
Honda marketed two eco-cars, the Brio and Brio Amaze in 2011 and 2012, respectively, which enjoyed high sales until 2013, propelled by the Yingluck Shinawatra's government first-time car buyer scheme. Sales of Honda's two eco-cars fell from 6,195 in 2014 to 2,132 in 2018.
Pitak Pruittisarikorn, chief operating officer, said Honda did not meet the first phase's requirement of producing 400,000 eco-cars.
"Honda decided to end the first phase this year, so the privileges from the Board of Investment [BoI] Honda received under the first phase will be calculated on our actual output since 2011," he said.
"The limited sales volume of eco-cars was caused by market competition and sentiment of the six car makers in this segment."
At present, Toyota and Mazda control the majority of Thailand's eco-car segment.
In 2014, Honda won BoI privileges to spend THB 8.16 billion (US$ 270 million) to make 100,000 units a year under the second phase. Each eco-car manufacturer has to begin production by 2019.
Yesterday it introduced the fifth-generation Honda City in Thailand, part of the second phase.
The City used to be categorised as a subcompact, with an engine of 1,500cc, subject to an excise tax of 20% for CO2 emissions of 133 gm/km. It is E85-compatible.
The updated City has a 1,000cc engine, is charged 12% excise tax and has CO2 emissions of 99 g/km.
With the lower excise tax, the retail price of the new Honda City is 10,500-40,000 baht cheaper than the previous iteration.
Mr Pitak said Honda is confident it can beef up sales of the City under the eco-car scheme because this model has been very popular since the first generation launch in 1996.
Honda reports sales of 690,000 City cars in Thailand and 4 million units in 60 countries.
The City sold more than 100,000 units in Asia and Oceania in the first nine months of 2019.