The plant, the Japanese automaker's third in Thailand and the first new one in 16 years, will start production in March 2012 and create about 3,000 jobs, it said in a statement. Capacity could be ramped up to 200,000 units a year in future, it said.
"The total investment will be 16 billion baht and we aim to sell it both in emerging and developed markets," President Osamu Masuko told a news conference in Bangkok.
The Global Small car, which will have an engine of 1.0-1.2 litres, will become one of Mitsubishi's core models, positioned as an entry-level car to meet growing demand for compact, fuel-efficient cars in both emerging and developed countries.
The sale price will be 400,000 baht ($13,300) in Thailand, Masuko said, adding that cars from the new plant would be sold in Japan.
The demand structure for automobiles changes, he said. "And swiftly and flexibly responding to these changes is necessary to succeed in increasingly intense competition."
The Japanese car maker will launch the new car at the Geneva motor show next year.
The new factory will be located about 100 km (62 miles) southeast of Bangkok, in the Laem Chabang Industrial Estate in Chonburi, where Mitsubishi also makes the Lancer, Pajero Sport, Triton and other models at two factories.
A Mitsubishi Motors spokeswoman in Tokyo said investment for the new factory was estimated at 10 billion baht, and the company would spend another 6 billion baht to prepare it for production of the new car.
Brazil, India or China?
In addition, Mitsubishi and the Thai government announced a joint study for fleet testing of electric vehicles. Through the Thai unit, Mitsubishi will begin an initiative for the future introduction of the i-MiEV, a new-generation electric vehicle.
Mitsubishi is currently selling the i-MiEV in Japan, Hong Kong and Australia.
It is also in the process of choosing Brazil, India or China as a production base for the global small car, Masuko said.
Masuko has said he wants to produce an electric-only version of the model for developed markets by the end of 2012.
Earlier, Toyota Motor Corp said it would raise production capacity in the fast-growing Thai market.
The world's biggest automaker plans to raise output capacity for its global IMV multi-purpose vehicle model by about 60 percent at one of its Thai factories from next August, and boost diesel engine capacity by 50 percent. (Reuters)
