India’s largest commercial vehicle maker has called off its ambitious Eco car project promoted by Thailand government. Other reasons than recent political turmoil seem to have motivate Tata’s retreat.

According to media reports, the tweaked excise duty structure coupled with commitment of big investment may have compelled Tata Motors to abandon this project.Confirming the development, Tata Motors spokesperson told NDTV Profit, “The company will not participate in the Eco Car project,” but did not cite the reason why.

Local media said earlier the excise tax proposed by the government for Eco Car was 17%, which over a period of time was increased to over 22% and it did not go down well the company. The company did not submit its detailed project report before the deadline of 31st March 2010 and this meant that its investment project certificate was terminated.

via Tata Motors shelves Thailand’s Eco Car project – NDTV Profit.

According to a news report in Bangkok Post on May 13, Tata Motors plans to introduce the Nano, the world’s cheapest and smallest car, in lieu of an eco car after it scrapped its project in Thailand.

The news report also said Tata Motors failed to meet Thailand’s Board of Investment’s March 31 deadline to submit its eco-car project details and preparations for development. As a result, the investment promotion certificate awarded to Tata Motors 18 months ago was terminated.

The Tata Motors spokesperson did not cite any reasons behind scrapping the project.

But rivals Toyota, Honda, Mitsubishi, and Suzuki have confirmed participation in the eco-car project.

Total vehicle sales in April were 57,111 units, up 44 per cent from the same month the year before.Of this, 24,367 units are cars, up 69 per cent, 22,235 units are one-ton pickups, up 18 per cent, and 10,509 units are other kinds of vehicles.Mazda Sales Managing Director John Ray said the auto market in Thailand had enjoyed a more promising prospect since 2009, particularly in November. He conceded the inauguration of Mazda 2 had pushed up local vehicle sales, particularly the B-Segment vehicles, for six consecutive months.

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