Bloomberg News

Ford Opens Thailand Plant to Expand Southeast Asian Export Hub

May 02, 2012

Ford Motor Co. (F:US) opened a $450 million plant in Thailand that can make 150,000 cars a year, expanding its export hub to meet rising demand in neighboring countries.

The automaker will begin producing its new Focus compact at the Rayong factory in eastern Thailand next month, the Dearborn, Michigan-based company said in a statement today.

The facility increases Ford’s annual capacity in Thailand to 445,000 vehicles as the automaker aims to boost global sales (F:US) to 8 million units by 2015 with one-third of deliveries in Asia by 2020. The Rayong plant is capable of producing six vehicle models as Ford expects to widen its lineup in ASEAN countries, New Zealand and Australia to compete with bigger rivals Toyota Motor Corp. (7203) and Volkswagen AG. (VOW)

The new factory presents a “sizable export” opportunity, Joe Hinrichs, president of Ford Asia Pacific and Africa, said in an interview yesterday. New Focus compact cars made in the plant will be exported to ASEAN countries, Australia and New Zealand, he said.

The Rayong plant is one of eight new factories Ford aims to open across the Asia Pacific and Africa under the mid-term plan ending 2015. The region accounted for about 7.5 percent of the automaker’s first-quarter revenue, according to data (F:US) compiled by Bloomberg.

The plant “will allow us to meet the enormous growth in vehicle demand across this region in the coming years,” Hinrichs said in the statement.

Ford’s production was hurt by Thailand’s worst flooding in almost 70 years last October, causing losses of more than $80 million, Hinrichs said.

Thailand Floods

“We lost a lot of production in the fourth quarter and coming into the first quarter, we still felt the languishing effects of that,” Hinrichs said. “But it hasn’t changed our fundamental strategy, which is our commitment to Thailand, as an export and manufacturing hub.”

The Asia Pacific and Africa business posted an operating loss of $95 million in the three months ended March, compared with $33 million profit a year earlier. This followed a loss of $83 million and $43 million in the fourth and third quarter last year respectively.

Thailand’s total car production rose 11 percent to a record 190,935 units in March from a year earlier, according to the Federation of Thai Industries.

Ford’s Rayong plant may add as many as 11,000 new jobs, including 2,200 direct jobs with Ford and 8,800 jobs through its supplier and dealer networks.

The company estimated local purchases of components will be worth as much as $800 million.

Ford last month said it would invest an additional $27 million with partner Mazda Motor Corp. (7261) in AutoAlliance Thailand, where it makes the Ford Ranger pickup and Ford Fiesta subcompact. The investment will be used to increase capacity by 20,000 units a year, the companies said in a joint statement April 25.

Outside of Thailand in the region, Ford is considering Indonesia for possible expansion, Henrichs said.

“Indonesia has great potential to be our important market tomorrow,” he said.

To contact the reporters on this story: Ma Jie in Tokyo at jma124@bloomberg.net; Daniel Ten Kate in Bangkok at dtenkate@bloomberg.net

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net


Silicon Valley State of Mind
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

Companies Mentioned

  • F
    (Ford Motor Co)
    • $17.41 USD
    • 0.00
    • 0.02%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus