German carmaker Volkswagen AG has been given the green light to invest in a production plant in Thailand, a move for expanding manufactures in the region after the ASEAN community is formed in 2015.

The investment which is under Thailand’s Eco2 programme would secure tax and customs advantages for Volkswagen if it builds fuel efficient cars. The plant though needs to produce more than 100,000 vehicles and to stars functioning by 2019.

Volkswagen spokesman for production Christoph Adomat was quoted by Bangkok Post newspaper as saying that the company was evaluating its options in Southeast Asia, but no concrete deal had been finalised.

However, Volkswagen CEO Martin Winterkorn has said that the company needed to expand its presence in Southeast Asia if it wants to achieve its goal of taking Toyota’s number one spot as the global market leader, according to a German newspaper.

Thailand is trying to attract more carmakers with tax and duty exemptions. Currently most manufacturers in the country are Japanese brands, including Volkswagen rival Toyota.-VNA