vw production

In April last year, it was reported that Volkswagen had applied to set up its first assembly plant in Thailand. It was said that the German automaker was seeking to participate in a government programme that offers tax exemptions for carmakers investing at least 6.5 billion baht (RM770 million) in local manufacturing.

In February this year, the company received the go-ahead from the Thai government to build a manufacturing plant near Bangkok. Despite obtaining the approval, VW said it was assessing the situation, and that no firm decision had yet been made on whether to build the factory.

Now, the Thai plant might not happen, given the far-ranging issues and fall-out the automaker is facing from its diesel emissions scandal. In addressing employees at a works meeting in Wolfsburg last week, new Volkswagen CEO Matthias Müller had stated that the automaker had initiated a further critical review of all planned investments, and that anything that wasn’t absolutely necessary was to be cancelled or postponed.

vw paint shop robots

The planned Thai factory may be one such casualty. The Nikkei reports that the automaker was poised to invest 31.4 billion baht (RM3.77 billion) in the new plant, which was expected to begin operations in 2019. The publication reveals that, according to company sources, the plan may now have to be revised or shelved. It added that a government official has expressed concerns that the plan could be canceled or scaled back.

Initial reports had indicated that the scope offered by the planned facility was in line with the second phase of the country’s Eco Car programme, though there was also mention that it was to build 1.4 litre petrol-engined cars, which didn’t quite fit the scheme’s requirements for petrol engines to have a displacement of 1.3 litres and under.

The requirements in Phase 2 of the Thai Eco Car programme include (for the vehicle) a fuel economy under 4.3 litres per 100 km, CO2 emissions under 100 grams per km, engines displacing 1.3 litres and under (petrol) or 1.5 litres and under (diesel), along with Euro 5, R94 and R95 compliance.