Tata Motors [Get Quote] is likely to have one more achievement to cheer about as it gets into the new financial year, when Thailand's Board of Investment (BoI) approves the company's proposal to make an eco-car.

A BoI official in Bangkok told Business Standard that the internal approval meeting, scheduled for April 2, 2008, was likely to give its nod to India's third largest passenger car maker to manufacture the eco-car.

BoI is the Thai equivalent of India's Foreign Investment Promotion Board (FIPB).

Govt initiative

The eco-car is an initiative of the Thai government to make the country a prominent producer of cars that meet state-of-the-art emission and safety norms with a stringent fuel economy of 20 km a litre.

Tata Motors will be the third global car maker to get approval for such a project after Suzuki Motor Corporation and SIAM Nissan Automobile, whose projects are expected to start commercial production in 2010.

BoI issued a notification in June 2007 inviting proposals from global car makers to manufacture the eco-car.

It set a minimum pollution standard of Euro-IV or higher, with emissions no more than 120 grams of carbon dioxide per kilometre. The car should also satisfy passenger safety standards for both front and side impact as specified by UNECE Reg 94 and Reg 95 respectively.

Tough conditions

Tata Motors has not made a formal announcement on its proposed investment for this project. But BoI stipulates a minimum investment of 5 billion Thai Baht (about $159 million, Rs 637 crore).

Approved eco-car projects will receive corporate income-tax exemption for eight years and permission to import machinery duty-free.

To meet the norms stipulated by BoI, Tata Motors may have to develop a new car from scratch. "While the emission and safety norms can be met, it would be a greater challenge to achieve the fuel economy stipulation," said an automobile expert. 

Tatas' people's car, Nano, promises a fuel economy of about 20 km a litre, but it may find it difficult to meet the front and side impact norms under UNECE regulations. Nano is set to hit the road in September this year, when its performance will be visible.

Bangkok auto show

A Tata Motors' delegation headed by Tata Group Chairman Ratan Tata and Tata Motors' Managing Director Ravi Kant will be in Bangkok on Thursday to flag off the company's rollout of the Xenon, its new diesel pick-up.

Tata Motors' first footprint in Thailand announced in 2006 is a 70:30 joint venture with a local assembler, Thonburi Automotive Assembly Plant Co, with the Indian company having a majority interest.

Xenon will have a 2.2-litre, 103-kw, common rail direct injection, Euro-IV-compliant diesel engine. It is offered in single-, double- and space-cabin versions in 4x2 as well as 4x4 configurations.

Tata Motors' shares closed nearly unchanged at Rs 678.75 on the National Stock Exchange, just Rs 1.35 lower from its previous close on Tuesday.