Tax reforms for the automobile sector will be aimed at supporting the development of alternative fuel systems as well as protecting car manufacturers, said the Finance Ministry.

Representatives of the Finance, Industry and Energy ministries are working with the National Economic and Social Development Board to draft a new development strategy for the auto sector. Local industry representatives will also be invited to comment and offer views on trends and obstacles

Tax reforms are likely to figure prominently in the plan, with fuel-efficiency incentives for automakers and consumers. Policymakers also want to protect what they see as a key competitive niche for the local industry - light pickup trucks, a segment that dominates vehicle sales thanks to favourable tax rates and continuous innovation by automakers.

While local consumer preferences and market conditions will be factored into the review, policymakers must also consider development trends abroad, given Thailand's aim to be a major export and manufacturing hub for the region, said a Finance Ministry official.

Excise tax now starts at 30% for cars with engines smaller than 2,000cc and under 220 horsepower. Pickup passenger vehicles, or passenger cars based on a pickup truck frame, are taxed at 20% for vehicles with engines of up to 3,250cc. Double-cab trucks. meanwhile, have a tax rate of 12% for vehicles with engines of up to 3,250cc. Vehicles powered by fuel-cell, hybrid electric engines or other technologies carry a tax rate of 10%.