Ford, Mazda to invest $500m mpre in Thailand

Ford, Mazda to invest $500m mpre in Thailand

Agence France-Presse, Bangkok

Ford Motor chief Bill Ford said on Monday that the firm and its affiliate Mazda Motor Corp. would invest US$500 million to expand production and support new vehicle programs at their Thai joint venture.

Ford said the AutoAlliance Thailand (AAT) joint venture, established in 1995 at an initial cost of $500 million, had proved to be a "sound and rewarding investment" for the automaker.

"Within the next three years, AAT will embark on a growth plan driven by new vehicle programs, with investments in facility upgrades, additional tooling and engineering, as well as an expansion of the plant's capacity to 200,000 units up from the current 135,000," he said in a statement.

After a meeting with Prime Minister Thaksin Shinawatra, Ford said Thailand was critical to the firm's regional operations.

"Thailand is an outstanding success story for us in Asia- Pacific," said the Ford chairman who was making his first visit to the kingdom.

"And I believe one of the reasons for our success here can be attributed to the Thai governments open policy towards foreign investment," he said, citing economic incentives and relaxation of foreign ownership restrictions.

Ford announced the world's second-largest automaker would establish its regional headquarters in Bangkok, to "spearhead" its Asian growth strategy.

"Thailand also offers the additional advantages of a large domestic market, the biggest pickup market outside of the United States, excellent energy and transportation infrastructure, strong supply base and available pool of skilled labor," he said.

Ford cited industry data that indicate the majority of global growth in the auto market from 2004-2010 will be in Asia, and most of that growth will be in the Association of Southeast Asian Nations (ASEAN), China and India.

An integrated ASEAN is expected to reach 1.6 million vehicles in 2005 and 2.3 million by 2010. By 2005, ASEAN is forecast to be the sixth largest regional auto market after North America, Western Europe, Japan, China and South America, he said.

Thanks to its central geographical position, good infrastructure, generous tax and legal incentives, and a supply of equipment and spare parts, Thailand has become a Southeast Asian manufacturing base for global automakers.

Many foreign automakers have established production facilities here and domestic vehicle sales have also been soaring in Thailand amid a strong recovery from the 1997-1998 regional financial crisis.