Cha-am, Thailand  - Thailand's Commerce Ministry on Thursday proposed that the Association of South-East Asian Nations (ASEAN) find a production niche for the region in eco-car manufacturing.

"We have proposed that the ASEAN private sector come up with regional guidelines for eco-friendly vehicles," said Deputy Commerce Minister Alongkorn Polabutr.

The proposal was mooted at a ministerial level meeting prior to the 15th Summit of the Association of South-East Asian Nations (ASEAN) being held in Cha-am, a beach resort 130 kilometres south-west of Bangkok, on Friday to Sunday.

"We have asked the ASEAN Automobile Federation to propose incentives for clean and green vehicles," Alongkorn said.

Thailand is currently a major hub for automobile manufacturing in South-East Asia but past production has focused mainly on one-ton pickups, the most popular vehicle in the country.

Two years ago the government offered tax incentives for major automobile producers such as Nissan, Honda and Toyota to invest in an eco-car program that promises to turn the kingdom into a major hub for green-friendly vehicles.

ASEAN will become a free market in 2010, dropping import tariffs to 0-5 per cent on intra-regional trade. Other ASEAN countries that have built up domestic auto industries include Indonesia, Malaysia and the Philippines.(dpa)