He said a number of auto makers have expressed interest to invest in Thailand, not only to make it production base but research and development center as well, which will help pushed Thailand to the forefront country small car production of the region.

Mr. Vallop said increase in the eco car demands will not erode the existing pick-up truck market due to they aim at separated segments.

There are currently 6 automakers invested in the eco car project in Thailand, lifting the government’s projection of 1.4 million mark of auto production per annum the new to 2.5 million mark over the next seven years, which reached the world’s top 10 largest auto production country by volume.

Mr. Vallop believes that the eco car can be promoted as another Thailand product champion beside the one-ton pick-up truck, which currently Thailand is the world’s second largest production country after the U.S.

According to Di Montezemolo, the company is modeling a Ferrari sport car powered by a Formula One-style hybrid powertrain.

Ferrari aims to reduce CO2 emission by 40 per cent between now and 2012.

The hybrid system is dubbed KERS and will use a spinning flywheel to regenerate energy during braking.

Di Montezemolo confirms the project car will still have the “fundamental” of a Ferrari with adding solar panels.

The new plant, to be built on its existing factory 70 km southeast of Bangkok, will add Toyota’s annual capacity of diesel engine to 350,000 units and create about 700 jobs in 2010, according to Toyota statement.

The expansion is aimed to meet an increasing demand in the IMV vehicle series, consisting of pickup truck, sport utility vehicle and the minivan.

In the meantime, the Japanese auto giant announced in Australia that will expand its production of hybrids to Australia and Thailand.

Toyota’s hybrid factory in Thailand will be its key hub for Asian operation and aims to churn out 9,000 Camry Hybrids for the regional market.

Mr. Suparat said he is confident that the domestic sale of vehicle would grow as targeted of 680,000 units while the export hits 770,000 units, up 20 per cent from last year, on hefty demand in Southeast Asia, South America and the Middle East.

He said small cars are also gaining popularity in the market.

Mr. Suparat, also an executive of Toyota Motor’s Thailand unit, said the company is planning to launch a CNG-retrofit vehicle in the third or fourth quarter this year.

However, this CNG-run vehicle, generally know as NGV; will be initially available only for taxi.

CNG price is currently 4-5 times cheaper than gasoline prices at the pumps.

Surapong Paisitpatnapong, spokesman of the Federation of Thai Industries (FTI) Automotive Industry Club, said that the value of exports jumped 33.66 per cent from the comparable period of 2007.

During the first quarter this year, the country produced 365,623 cars, up 24.52 per cent from the corresponding period of last year, said Mr Surapong. Car exports during the first three months this year totaled 197,550 units, up 27. 85 per cent from a year ago, while the country earned about Bt88.9 billion, an increase of 29.88 per cent, he said.

The total production of motorcycles during the first quarter of this year stood at 798,694 units, down 1.47 per cent from a year ago, he said.