BANGKOK: The divergent green car policies across Association of Southeast Asian Nations (Asean) create unique combinations of market “push” and “pull”, dramatically impacting demand patterns and opportunities for future growth, according to Frost & Sullivan.

Dushyant Sinha, associate director of the automotive practice for Asia-Pacific, said yesterday that the three biggest auto countries in Asean – Thailand, Malaysia and Indonesia – have all embarked on low emission, high mileage vehicles, but their policy approaches and focuses are significantly different.

Thai eco cars have stringent product and investment requirements, while Malaysian EEVs cover the widest possible range of segments and vehicles.

Thailand provides a bouquet of incentives across income tax, excise duty and import duty, while Malaysia customises its offerings based on how strategic the investment is.

The developments in the green car space are not limited to the Big Three. The other two Asean countries boasting local manufacturing – Vietnam and the Philippines – are also toying with various policy initiatives and roadmaps to boost investment.

In the Philippines, the hybrid incentive bill is on the verge of becoming a law and is expected to further support existing grassroot initiatives such as the e-jeepney.

Thailand’s limited market necessitates a strong “push” strategy with government support such as the first car buyer policy, while Indonesia’s large and growing customer base and low motorisation create a natural growth engine to drive forward its low-cost green car agenda.

It is the strong policy “push” that has given Thailand a significant lead over Indonesia and Malaysia in the green car space. However, its sustainability would be a key challenge over the next decade.

Thailand has been a virtual pioneer in the green car space in the region. The eco car programme, launched in 2007, is the bedrock of the government’s green car policy. So much so that green cars are virtually synonymous with eco cars in Thailand, although the former also include hybrids and other alternate fuel vehicles.

Eco cars have changed demand patterns in a market dominated by pickup trucks. Close to 180,000 eco cars were sold last year, representing a penetration of about 27 per cent, making green cars the fastest growing segment in the last four years.