Ford Motor Co. (F) announced that it would invest $450 million to build a new manufacturing facility in the eastern province of Rayong, Thailand. This will be the automaker’s first fully owned manufacturing base in the country.
The 750,000 square meter plant will be initially geared to produce Ford Focus passenger cars from 2012, with an annual capacity of 150,000 vehicles. About 85% of the production will be exported to markets outside Thailand. Later, the plant will be tuned to produce a range of vehicles based on different platforms.
Ford decided to source components worth $800 million for the plant from Thailand itself. The plant has the potential to create up to 11,000 new jobs.
Ford’s investment in the new plant is a part of its major expansion plan in the emerging countries, including Argentina, Brazil, China, India and Thailand. Through the expansion plan, the company aims to tap the growing market potential in the emerging countries, especially those in Asia.
According to Peter Fleet, Ford’s president for the 10-country Association of South East Asian Nations (ASEAN), Asia is expected to account for 40% of growth in the auto industry over the next five to seven years.
Since 2009, Ford has invested $2.4 million in Brazil to increase output by 20% per year. The automaker plans to invest a total of $450 million in its Argentine and Brazilian operations.
Since last year, Ford has also invested $510 million in China and $500 million in India as part of its expansion plan. It intends to raise annual production capacity from 450,000 vehicles to 600,000 vehicles in China and double to 200,000 units–250,000 units in India from 2010.
Overall, the new investment in Thailand will enhance Ford’s production capacity in Southeast Asia by more than 50%. So far, the automaker has invested 50 billion baht ($1.55 billion) in Thailand.
The automaker operates a joint venture, AutoAlliance, with Japan’s Mazda Motor in Thailand. Last year, it invested $500 million in a new plant owned by the joint venture in Rayong.
The new AutoAlliance plant, with an annual capacity of 100,000 units, has been designed to produce Mazda 2 compact cars and a new Ford Fiesta sedan. It has raised the total capacity of the joint venture plant in Rayong to 275,000 units.
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