With the new Lancer, Mitsubishi expects 80 per cent of sales to be of the 1.8-litre GL version, which can use E85 gasohol, while the rest will be the non-E85-compatible 2-litre GT version. The Lancer EX will cost between Bt831,000 and Bt1.034 million and has been designed to appeal to unmarried drivers with monthly income of Bt50,000 to Bt100,000.

Mitsubishi Motors (Thailand) expects to sell 4,000 units of the Lancer EX, the ninth generation of the Lancer, within the first six months and export the locally produced cars within a year.

"The Thai government greatly supports environmentally friendly technology like E85. We'll study the market and see later if an E85 version of the 2-litre engine is required," company president Nobuyuki Murahashi told a press conference yesterday.

At present, the Lancer is produced at Mitsubishi's Laem Chabang plant, making it the Kingdom's first mass-market flexifuel vehicle.

However, the local content of the vehicle has not yet reached 40 per cent, which means the vehicle cannot be exported. Murahashi said it would be ready for export within a year.

The distinctive design of the Lancer EX is expected to bring back fans.

Mitsubishi will also sell the previous version.

"This will appeal to people who want a cheaper C-segment car. The car is likely to cost in the range of Bt600,000. We expect to sell 150 units per month of the previous generation," he said.

Due to its E85 capability, Mitsubishi enjoys with only 22-per-cent excise tax, compared with 25 per cent for E20 vehicles. However, Mitsubishi does not directly benefit from this, but rather receives a 3-per-cent rebate from the government. This is only 5-per-cent more than the 17-per-cent excise tax on eco-cars.

Toyota and other auto-makers planning to produce eco-cars have asked for a lower tax rate than 17 per cent.

Nissan and Honda have confirmed their intentions to manufacture eco-cars.

The Lancer EX is set to compete with other C-segment vehicles, such as the Toyota Altis, the Honda Civic, the Mazda3, the Ford Focus and the Chevrolet Optra.

But the C segment is shrinking in Thailand. In the first eight months of the year, the C segment accounted for only 35 per cent of the passenger-car segment, down from 39 per cent in the same period last year. More people have turned to B-segment vehicles like the Honda Jazz and the Toyota Yaris, due to benefits in fuel economy. Mazda will launch the 2 and Ford will launch the Fiesta within the next six months, both of them B-segment cars.

"We are aware of the growth of the B segment, but Mitsubishi is one of the companies which is looking at producing the eco-car in Thailand. So we will put all our focus on this for now. We've not yet reached a final decision on the eco-car, but we are happy with the 17-per-cent excise tax structure," Murahashi said.

The Lancer EX will be officially launched on October 16 at CentralWorld, although advance bookings will start this week.