Ford Plans $450 Million Thailand Plant After Riots

[STEVE G]

June 24 (Bloomberg) -- Ford Motor Co. said it will build a $450 million car factory in Thailand, its first wholly owned plant in the country, undeterred by fatal anti-government protests in Bangkok earlier this year.

The automaker will make Focus cars for domestic and export markets at the factory, which is due to open in 2012, it said in a statement distributed ahead of a Bangkok briefing today. The plant in Rayong province, 200 kilometers east of the capital, will have an initial capacity of 150,000 cars a year.

Ford delayed the plant announcement in April after Prime Minister Abhisit Vejjajiva imposed a state of emergency amid deadly rioting. The resumption of the plan reinforces Thailand’s role as regional automaking center at a time when strikes over pay have disrupted production at Honda Motor Co. and Toyota Motor Corp. plants in China.

“As China faces labor shortages and higher wages, Thailand will be among Asia’s most attractive destinations for new investments by automakers,” said Charl Kengchon, managing director of Kasikorn Research Center Co., a unit of Thailand’s third-biggest bank. “Thailand has the most developed infrastructure for the auto industry in the region.”

Toyota and Honda this week halted production at factories in southern China after suppliers’ plants were closed by strikes. Labor disputes have spread in China since Honda agreed to raise wages at a parts-maker by 24 percent to end a stoppage.

Asian Strategy

Ford’s new factory in Thailand will create 2,200 jobs at the automaker and a further 8,800 at suppliers, the Dearborn, Michigan-based company said.

“We do see a lot of potential for Ford as we plan to bring more products into Thailand and the region,” Joe Hinrichs, president, Ford Asia Pacific & Africa, said at a briefing in Bangkok today. “We need additional capacity as we add more products into these markets. Thailand will play a critical part in Ford’s strategy.”

Ford and Japanese partner Mazda Motor Corp. have already invested about $1.5 billion in pickup truck and passenger-car factories in Thailand, according to the website of the venture, Auto Alliance (Thailand) Co. The venture last year opened a $500 million passenger-car plant, its second facility in the country.

Toyota, Honda Motor Co. and General Motors Co. have also built plants in Thailand, Southeast Asia’s second-biggest economy, lured by tax incentives and demand amid a domestic population of 67 million. Automakers may produce a record 1.6 million vehicles in the country this year, 60 percent more than in 2009, according to Kasikorn Research.

Rising Auto Output

Thai auto production doubled to 620,116 vehicles in the first five months as low borrowing costs boosted domestic sales and a global recovery increased overseas shipments, the Thai Automotive Club, a trade group, said on May 17.

Anti-government protests have had little effect on auto production as rallies have mainly happened in Bangkok. Demonstrators clashed with police during rallies in the capital from March to May, leading to at least 89 deaths.

The plant will be built in Rayong on land owned by Hemaraj Land & Development Pcl, Thailand’s biggest industrial developer by market value, said Raj Nair, vice president for operations for Ford’s Asia Pacific and Africa region. Hemaraj shares gained as much as 4.2 percent to 1.5 baht in Bangkok trading, headed for their highest close since January 2004.

The factory, which will cover about 70 acres (28 hectares), will be close to the existing Auto Alliance plant, Ford said.

“The highly flexible plant is the latest proof of our aggressive expansion strategy in the Asia Pacific and Africa region,” Hinrichs said at the briefing. “Thailand has worked hard to become a center of excellence in the global auto industry and will be an integral component driving the continued growth in Asia.”

[richard]

Guess the Thai government don't give two hoots about the failing tourist industry ( a mere 6% of the economy) when giants invest in Thailand and boost exports up by 30%

[Spitfire]

China could in the future be no good for western manufacturers, as we have seen recently, Chinese companies only by the looks of it. Shrewd move by Ford, especially as Ford cars are mistakenly viewed here as expensive high end quality vehicles and priced accordingly. They will make a fortune, especially once the exchange rate adjusts itself to reality.

[Super Joe]

Guess the Thai government don't give two hoots about the failing tourist industry ( a mere 6% of the economy)

http://www.huahinafterdark.com/forum/vi ... 70#p175370

SJ

[richard]

SJ

They don't give two hoots about residents either

[pharvey]

China could in the future be no good for western manufacturers, as we have seen recently, Chinese companies only by the looks of it. Shrewd move by Ford, especially as Ford cars are mistakenly viewed here as expensive high end quality vehicles and priced accordingly. They will make a fortune, especially once the exchange rate adjusts itself to reality.

Spitfire.. You seem an expert on China from a few posts. You obviously have the experience, and with with no offence, care to share it?

[PeteC]

Here's some background about Ford in Thailand. They've been here a long time and this new plant is an addition. Pete

AutoAlliance Thailand (AAT) is the name of a joint venture automobile assembly firm co-owned by Ford Motor Company and Mazda Motor Corporation in Rayong province, Thailand. Modeled after the Ford-Mazda AutoAlliance International joint venture in the United States, AAT builds compact pickup trucks and SUVs primarily for the South-East Asian market, with exports to other developing markets, and Europe as well.

The factory in Thailand is designed to be similar to Mazda's Hofu plant, and is arranged as four squares.

Ford's sales in Thailand began in 1913 with the Model T, but it was only in 1961 that Ford began construction there. Anglo-Thai Motors Company, Ford’s distributor, announced in 1960 that it would build a factory in the country, with Thai Motor Company the result. This was the first time automobiles had been built in Thailand.

Ford brought Thai Motor under the corporate umbrella in 1973, but closed the factory just three years later. Company presence returned in 1985 with the formation of New Era Company to push cars and trucks in the country.

Construction on the new AutoAlliance plant began on November 28, 1995, and the plant began mass production on May 29, 1998. The grand opening ceremony on July 1, 1998, included Chuan Leekpai, prime minister of Thailand.

[nanyang]

China could in the future be no good for western manufacturers, as we have seen recently, Chinese companies only by the looks of it.

Spitfire.. You seem an expert on China from a few posts. You obviously have the experience, and with with no offence, care to share it?

Given your question you imply that you understand the initial sentence.

[charlesh]

That's all the world needs - not another 150,000 utes with blackened out windows ha, ha. However a Ford manufactured in Thailand couldn't be any worse than the tanks they make in the US especially if they have Japanese management, training, QC and supervision ha, ha!!!!

[Spitfire]

I've been away for a few days but have to agree with Nanyang about my post Pharvey, my post stipulated "could" which implies possibility, not certainty. It was a speculative post designed to propergate discussion even though under a potentialy provocative title/intial offering that may or may not inspire reaction in a postitive or negative fashion. In no part of that post did I claim the title of omnipotence of the situation, just an observational diagnostic of the situation which invited comment, to be fair.

Your post was a loaded question , so, therefore, I can't answer it in an honest fashion.

Edit: For Clarity

[STEVE G]

That's all the world needs - not another 150,000 utes with blackened out windows ha, ha. However a Ford manufactured in Thailand couldn't be any worse than the tanks they make in the US especially if they have Japanese management, training, QC and supervision ha, ha!!!!

I would rather have a Toyota anyway, but at least the investment is a bit of positive news for Thailand, whatever they decide to build.
(I think it's actually a Ford Focus plant.)