Tata Motors has shelved its plan to participate in the Eco Car project in Thailand, a year and a half after it had received the investment certificate from the Thai Board of Investment.

Apparently, the Thai government’s decision to increase the excise tax on the Eco Car from 17% to 22% didn’t go well with Tata Motors. Another reason reportedly is that Tata Motors failed to meet the March 31, 2010 deadline to submit the detailed project report, which led to the termination of the investment certificate.

Tata Motors had joined other OEMs like Toyota, Honda, Mitsubishi, Suzuki for the ‘Eco Car’ project being promoted by the Thailand government. The project involves the design and manufacturing of 100,000 units annually, of a car with a less than 1.4 litre Euro IV engine with emission level of less than 120gms of Co2 per km. The minimum investment for the Eco Car project was pegged at Rs 600 crore.

Instead of the ‘Eco Car’, Tata Motors may launch a tweaked version of the Nano in Thailand, as reported by Autocar India earlier. Tata Motors is learnt to have held customer clinics of the Nano in various provinces in Thailand. A Tata Motors spokesperson did not comment on the Nano’s Thai launch, but said that the company will launch a “highly fuel-efficient and environmentally-friendly car with appropriate investments for local production in Thailand.”