Ford underscores long-term confidence

Auto & Audio April 12, 2014 00:00

By Pichaya Chansgorn

The Natio

6,415 Viewed

Ford is confident that the Thai automotive industry, which has proved resilient in the past decade, will eventually recover from the current political crisis, says its chief executive for the Southeast Asian region.

Matt Bradley, president of Ford Asean, yesterday called a press conference with international media representatives in Thailand to reaffirm the automaker’s commitment to the Kingdom’s eco-car Phase 2 project, for which it submitted an application to the Board of Investment (BOI) last August 31.

"The first-car policy and the current political situation certainly curtailed consumer spending in the short term, but we don’t see any long-term impact. We stay committed to our plans and strategies for Thailand," he said.

Thailand’s domestic automobile sales dropped from 1.4 million units in 2012 to 1.3 million last year and are estimated to fall further to 1 million units this year, he said.

Bradley declined to provide any details on Ford’s eco-car project, including the start-up schedule, planned models, production capacity, and investment budget.

He held the press conference in the presence of BOI officials at the Ford Asean office in Bangkok.

Ten automobile companies, comprising the five firms that took part in Phase 1 of the eco-car project –Toyota, Honda, Mitsubishi, Suzuki, and Nissan – and five newcomers to the scheme including Ford and General Motors, have given notice of their interest in joining in Phase 2.

In exchange for tax and non-tax incentives, each investor in Phase 2 of the project must meet requirements, including a minimum investment of Bt6.5 billion, production of no fewer than 100,000 units in the fifth year after start-up, and a provision that the investment must cover assembly, parts and engine production.

Bradley said Ford was confident that it could meet the BOI’s requirements, while the project, which aims to promote the production of environmentally friendly, fuel-efficient vehicles, fit well with company policy.

"We’re confident in the stability of Thailand to maintain the vibrant automotive industry here," he said.

Bradley said that during the past six years, Ford had invested US$1.5 billion (Bt48 billion) in Thailand, one of the highest amounts among all automotive manufacturers here. Investments on that scale, he said, were not made out of a short-term decision process.

He said Thailand was the 10th-largest automobile-producing nation, at 2.5 million units in 2012. Ford will continue to leverage Thailand as the production and export hub for Asean and outside the region.

Ford has two assembly plants in Thailand. One is a joint venture with Mazda run by Auto Alliance (Thailand) that has an annual capacity of 290,000 units, and the newer one under Ford Thailand Manufacturing has a capacity of 160,000 units per year. Ford currently exports about half of the total output from Thailand to Australia, New Zealand, other Asean markets and other countries.

Despite the high number of companies participating in the second phase of the eco-car project, Bradley said Ford did not foresee any overcapacity. The competition would be the same as elsewhere in the world, and Ford now had flexibility in its manufacturing and global product portfolio to match demand under the project.

"We have the products in mind. We have our product portfolio to choose from under the ‘One Ford Plan’," he said, citing the company’s vision that included globalised product line-ups.

Ford plans to increase its market share in Asean, which has grown from 1 per cent in 2010 to 3 per cent at present. Though he declined to be specific on Ford’s Asean target, he noted that globally its market share was 7 per cent.

The company expects the Asean automobile market to grow from 3.3 million units at present to 5 million by 2020. Asean is part of the Asia-Pacific region that Ford expects to represent the largest growth opportunity for the company, accounting for 60-70 per cent of its growth in the next five years.

The company increased its share in the Thai market from less than 2 per cent in 2010 to 4 per cent at the end of last year and 4.5 per cent now, partly because of an expanded product line-up.

Ford’s retail sales for the Asean region in 2013 rose more than 7 per cent year on year to an all-time best of 95,906 units.