Thai auto parts manufacturers complain that the government is showing stronger support for foreign investors in the industry while paying less attention to Thai operators.

They also accused automobile makers of treating Thai suppliers unfairly by setting certain specifications to favour producers from their home countries.

"There is a tendency toward diminishing government support of Thai parts makers, especially those small and medium-sized enterprises that are regarded as the grass roots level essential for driving the country's economic engine," said Pramote Pongthong, president of Thai Auto Parts Manufacturers' Association.

Mr Pramote said the Board of Investment (BoI) was reluctant to grant promotional privileges to Thai investors who needed to expand their operations in Zone 1, covering the most developed provinces, unless they supplied parts to one major automaker whom he did not identify.

He also said major parts manufacturers who supplied at least 80% of the parts to auto assemblers, known as original equipment manufacturers (OEM), were discriminating against Thai suppliers.

The assemblers set parts specifications to favour foreign suppliers coming from their home countries, especially specifications concerning the sources of raw materials, he said.

If the parts were made from materials available in Thailand, he said, they rejected the deals, claiming the goods were not serviceable.

In some cases, the assemblers forced Thai suppliers to reduce their prices to unsustainable levels, otherwise they would lose the deals.

"Parts supplied to assemblers are getting cheaper and cheaper but vehicle prices are becoming dearer every year,'' said Mr Pramote.

As well, he said, the government had been actively encouraging small and medium-sized parts manufacturers from Japan to shift their bases to Thailand, a move that local operators fear would have an adverse affect on Thai manufacturing.

Concern is growing to the extent that some Thai operators may have to close down their businesses due to unfair treatment because foreign-owned assemblers, especially from Japan, would give priority to home-country suppliers.

Mr Pramote said the government's existing assistance extended to supporting parts exports should be maintained, such as tax rebates on raw materials used in producing goods for export. The incentives were seen as essential to strengthening competitiveness.

The Federation of Thai Industries said earlier that local parts manufacturers would lose more than one billion baht if the government eliminated the tax rebate, as it would automatically force auto assemblers to use imported parts that attracted lower duty rates.

The association also asked the government to make it a policy for government agencies and state enterprises to buy vehicles that used local contents of at least 60% in order to support local manufacturing.