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Ford invests US$450million to build a passenger car plant in Thailand

By Rigval on 29 Jun 2010

Attached Image: ford_rayong_plant_expansion_thailand.jpg

FoMoCo, or the Ford Motor Company had last Thursday announced a US$450 million plan to build a new vehicle manufacturing plant in Rayong, Thailand. The plant will produce passenger cars mainly for the ASEAN market as well as the Australia-Oceania region and will have an annual capacity of 150,000 units.

This new plant, scheduled for completion in 2012 is part of the automotive giant's expansion campaign in Asia. Joe Hinrichs, president of Ford Asia Pacific and Africa had stated that this news, "certainly reaffirms the vital role that Thailand has and will continue to play as a global production and export base for Ford Motor Company."

The new plant will be set up to produce the next generation Ford Focus and the plant will be the second manufacturing plant by Ford in Thailand after the joint Ford-Mazda plant totaling US$50 at Auto Alliance Thailand (AAT) in 2007. This plant which currently produces the Mazda 2 sedan & hatchback for Thailand and Malaysia is also in Rayong and has an annual production capacity which is planned to produce 275,000 units annually and is scheduled to begin production of the ASEAN market Ford Fiesta (both sedan and hatchback) soon.

The new plant will be located close to the AAT plant and will be a highly flexible in nature; capable of producing a diversified range of products when there is demand and requirement. Ford is planning to expand its product portfolio in Thailand as well as throughout Asia. Up to 85 percent of the plant's production will be for markets outside Thailand.

Thailand was chosen because it has a world-class supply base for the auto industry, highly efficient logistics network, highly skilled workforce and the consistent support from the Thai government. Thailand, according to Ford has continually proved its automotive competitive strength in the international auto industry.

The reason for Ford's seeming rapid expansion in Asia (totaling close to US$1 billion in South East Asia alone) is that Asia is expected to account for roughly 40% of the growth in the auto industry over the next five to seven years. The expansion campaign includes another investment total of US$1 billion to further expand Ford's operations in China and to meet the explosive demand for autos in that market. Ford also has facilities in India another market with a huge population, which Ford wants to see it become a global manufacturing and export hub for smallcarsof Ford, something like what Suzuki and Hyundai are doing. India will see a US$500 million investment too.

Notice one thing? If you open up your economy to multi-national companies that think global and want very little restrictions in setting up businesses billions of dollars seem to roll in. When you start comparing what Thailand did to bring in investments and what Malaysia did in closing its doors in order to start its own car company I somehow wonder whether it is worth it to produce your own brand of car or get others to bring in money and make their own cars. Anyway, it is all these different moves and plays that make this industry pretty interesting to observe.

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Written by Rigval
Born in 1972. Married with a kid. Loves B-road drives and have driven cars from the 1950s to date.

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