Nissan Motor Thailand will continue to make new investments in Thailand, focusing on hybrid electric vehicles (HEVs), though it needs to close a car assembly plant under a plan to adjust its production costs, says the Board of Investment (BoI).
"That is the company's production line integration plan to increase cost management efficiency," said Narit Therdsteerasukdi, secretary-general of the BoI.
He was speaking after meeting with Toshihiro Fujiki, president of Nissan Motor Thailand, to discuss the business direction of the Japanese automaker.
The talks came after Nissan Motor Thailand launched a statement announcing that it is consolidating part of its vehicle production at its two factories in Thailand and upgrading the production lines, starting from the first quarter of this year.
"This effort aims to optimise fixed costs as well as prepare for future model localisation in Thailand," the statement said.
Nissan's first plant, which was built in 1975 in Samut Prakan, will be closed for vehicle assembly. The facility will be used for body, plastic and press shops, and operations logistics.
Car assembly will be performed at the company's second plant, which was built in 2024, according to the BoI.
The company is planning to join the BoI's investment promotion policy, which will grant excise tax reductions to businesses making HEVs. The tax rate will be reduced to 6-9%, effective for seven years between 2026 and 2032, said Mr Narit.
"The company wants to make additional investments in Thailand to produce new-generation cars. It plans to launch new car models between 2026 and 2027," he said.
Automakers eligible for the tax incentives are required to invest at least 3 billion baht by 2027.
They also need to use key HEV components produced domestically. Locally produced batteries must be used in car manufacturing from 2026.
The excise tax rates will depend on the carbon dioxide emissions of HEVs. If carbon dioxide emissions do not exceed 100 grams per kilometre, a car will be given the 6% tax rate. The tax rate increases to 9% if a car releases carbon dioxide of 101-120 grams per kilometre.
Nissan Motor Thailand said last year that it was determined to focus more on manufacturing HEVs in Thailand. The company did not reveal the value of its investment, saying only that the budget should be higher than the 3-billion-baht threshold.