Nissan became the first company to launch its eco-car in Thailand with its new March at the recent Bangkok Motor Show. Other Japanese carmakers like Toyota and Honda are expected to follow suit; the latter showed off its New Small Concept at the Thai show. Meanwhile, Volkswagen and Suzuki are likely to help each other develop an eco-car in Thailand, according to an industry source.

Bangkok Post reports that a senior official at Thailand’s Board of Investment (BoI) confirmed the German and Japanese automakers were negotiating about collaborative possibilities. Small car expert Suzuki is already a certainty, after reaffirming its stand to go ahead with a 7.5-billion-baht eco-car venture in Thailand last year. VW meanwhile, was among seven automakers applying for promotional privileges from the BoI. The state agency approved the proposals of six companies (Nissan, Toyota, Honda, Mitsubishi, Suzuki, Tata), but asked for additional details from Europe’s biggest carmaker.

The industry source said that Volkswagen had now embarked on a new push and was negotiating with Suzuki about jointly developing the small, fuel-efficient cars in Thailand. It was previously reported that VW planned to invest 27 billion baht for the eco-car project, a sum much higher than the others. This was because VW has no presence in Thailand and needed to start its venture from scratch, including parts sourcing. Suzuki could be the answer to these obstacles.

Suzuki, now 19.9% owned by VW, is commited to build facilities for pressing, welding, painting, assembly and engine production. Its plan is to start producing 1.3-litre eco-cars in 2012, initially at 10,000 units per year. Suzuki majors in small cars and is an established player in India and ASEAN, and these were among the star points Volkswagen saw when it bought into the Hamamatsu based company. Well, it looks like Wolfsburg is getting its first “dividend” with this Thai eco-car scenario.

Malaysian carbuyers could stand to enjoy some spill over effects of these developments in Thailand. To qualify for eco-car duty cuts and tax breaks, 70% of production must be for local consumption, which means eco-car participants can export the rest of these small, fuel sipping cars – and as the region’s biggest passenger car market, I can bet we figure in their plans.