Volvo to make Thailand production hub

Volvo to make Thailand production hub

BANGKOK : Swedish automaker Volvo plans to turn its Thai manufacturing operations into a regional production hub for heavy trucks and buses over the next five years, the Bangkok Post reported on Friday.

Volvo aims to double its use of local content from Southeast Asian suppliers to 40 percent by 2008 in a bid to export vehicles to Vietnam and Indonesia at favorable tariff rates under the ASEAN Free Trade Area agreement, it said.

The Nation newspaper meanwhile said Volvo also plans to increase local sales in the truck and bus sector to more than 5,000 units over the next five years.

"Although local truck sales accounted a mere one percent of the group's total revenue, Thailand's high growth frontier in the truck market has given us confidence that we can widen the customer base," said Olof Rapp, Volvo Truck and Bus (Thailand) managing director.

However, Rapp told the Bangkok Post that he believed truck sales would decline slightly this year due to the SARS outbreak, which has hit Thailand's tourism industry. --AFP