Tata Motors Thailand has denied reports that it plans to postpone its eco-car project in Thailand.

The local unit of the Indian automaker issued a statement saying it was going ahead with the venture and was evaluating land at various industrial estates to set up the plant, which would require 500 rai.

As well, it said, Tata Motors was currently working with the Board of Investment to finalise details of the project.

Thailand's eco-car policy mandates all manufacturers to meet stringent emission and safety requirements, including the Euro 4 emission norms and crash compliance. Tata Motors is in the process of developing the vehicle to meet these requirements as well as local customers' preferences.

According to the regulations, all manufacturers should start production within 66 months of project approval. Tata said it was confident in starting production within this timeframe.

Earlier, a prominent land developer claimed Tata Motors had suspended plans to purchase an eco-car factory site in one industrial estate in Rayong, citing the global economic slowdown, especially the worsening US situation.

But the source said Tata Motors' executives visited the site in question but never had talked with the developer about a land acquisition.

"He (the developer) should not have quickly jumped to the conclusion that Tata Motors had already postponed the eco-car project simply because the company suspended the purchase of his land," said the source.

Tata Motors has announced plans to invest 7.317 billion baht to make eco-cars in Thailand at a capacity of 100,000 units per year, more than half of which would be slated for export.