Nissan Motor Thailand is set to enhance its focus on hybrid electric vehicle (HEV) production, driven by the Thai Board of Investment's (BoI) new incentive package aimed at promoting HEV manufacturing. To qualify for these incentives, which include an excise tax reduction, manufacturers must invest a minimum of 3 billion baht in local HEV production. Although Nissan has not disclosed its exact investment amount, it is anticipated to exceed this threshold.

Toshihiro Fujiki, the newly appointed president of Nissan Motor Thailand, announced plans to introduce five new car models between 2025 and 2027, with deliberations ongoing about which models will be produced locally. The production of HEVs is planned for their factory in Samut Prakan. This announcement follows the BoI's decision to support HEV manufacturing by reducing the excise tax from 2028 to 2032.

Nissan is committed to investing in and expanding its operations in Thailand, a key automotive manufacturing hub in the region. The company plans to import new models, including passenger cars, pickups, and trucks, into Thailand next year. Fujiki anticipates that Nissan's market share will grow to 3% this year, up from 2.2% in 2023, with domestic sales reaching approximately 5,000 units in the first half of 2024.

Despite facing challenges such as sluggish sales in Thailand's automotive sector and increased competition from Chinese EV manufacturers, Nissan is optimistic about its future prospects. The number of Nissan showrooms in Thailand has decreased from 161 to 141 in 2024. However, the introduction of five new models is expected to revitalize sales, which have been declining over the past few years, according to senior vice-president Masao Tsutsumi.

Thailand's HEV Incentive Policy

The Thai government has launched a new set of incentives aimed at boosting the production of HEVs in the country. These incentives include a reduction in excise taxes for manufacturers who invest at least 3 billion baht in local HEV production. The excise tax for HEVs is set to be lowered from 2028 to 2032, which is expected to attract significant investment into the sector and support the transition from internal combustion engine vehicles to more environmentally friendly options.

Nissan's decision to concentrate on HEVs aligns with the Thai government's goals to improve air quality and reduce carbon emissions. The government's policy aims for zero-emission vehicles to account for 30% of all new vehicles produced in Thailand by 2030. This policy is part of Thailand's commitment to achieving carbon neutrality by 2050 and net-zero emissions by 2065.

Market Dynamics and Challenges

Despite the positive outlook, Nissan and other automakers face challenges in the Thai market, including sluggish sales and increased competition from Chinese EV manufacturers. The introduction of new models is expected to help Nissan regain market share, which stood at 2.2% in 2023, with expectations to increase to 3% in 2024.

The overall automotive market in Thailand has been affected by slow GDP growth and stricter auto loan criteria, which have impacted consumer purchasing power. However, the new HEV incentives provide a promising opportunity for Nissan and other manufacturers to capitalize on the growing demand for eco-friendly vehicles.