BMW picks Thai plant as regional launching pad

BMW picks Thai plant as regional launching pad

BANGKOK (AP): Bayerische Motoren Werke AG, or BMW, will start rolling sedans off the production lines at a new plant in Thailand early next year, hoping to capitalize on a nascent economic recovery, the company said Wednesday.

Jesus Cordoba, president of BMW (Thailand), told The Associated Press in an interview that production targets of 10,000 vehicles per year should be reached by 2004 and will initially be aimed at the Thai market.

"Afterward, we will study the possibilities of expanding our market to cover all the countries around Thailand, the Southeast Asian markets, and expand production to 20,000 to 30,000 units a year," Cordoba said.

The 1.2 billion baht plant in the eastern auto production center of Rayong, where Western automakers Ford and General Motors also have facilities, is viewed by BMW as getting a bigger foot in the Asian market. Until now, the firm has relied on a local partner to assemble vehicles from kits.

The plant will create jobs for 500 Thai workers, Cordoba said, and expatriate German staff will be coaching Thais to run the factory in two years, though management will remain in German hands.

Thailand has become the offshore Southeast Asian manufacturing center for many of the world's big carmakers, particularly the Japanese.

The domestic market shrunk when the Asian economic crisis struck in 1997, but manufacturers are increasingly tooling Thai plants to export vehicles to other parts of the region.

Sales in the Thai passenger car market are expected to grow 18 percent this year from 1998, the worst year of the crisis, reaching 55,000 vehicles. BMW hopes to get 3 percent of that. In the luxury performance segment, BMW's target is to get 30 percent, with total sales expected to reach 6,200 from 4,983 last year.

In the first half of this year, BMW sold 900 luxury sedans, an increase of 65 percent year-on-year from 546 units.