Following its business restructurings and exits from some key auto markets like India, Brazil and Russia to simplify operations, Ford Motor Company has recently announced an investment of US$900m in Thailand to strengthen its production base in the country.
This development is in line with the company’s new business priorities aligned under the ‘Ford+’ strategy that is set to strengthen its position in the Asia-Pacific (APAC) region, says GlobalData, a leading data and analytics company.
Exit from India makes Thailand as the largest production base for Ford in Asia. The company has two production plants with a cumulative capacity of over 270K units annually. The investments are aimed to modernize facilities, strengthen supply chain, enhance domestic operations, and increase capacity utilization to support the domestic and export production. The investments would increase automation to 80% at Ford Thailand plant and 69% at AutoAlliance JV plant. Increased automation will also make the assembly flexible to manufacture multiple variants on the same line.
Bakar Sadik Agwan, Senior Automotive Consulting Analyst at GlobalData, comments: “With conducive regulatory environment, strong auto supply chain and quality workforce, Thailand have been able to lure global OEMs to make the country their export base. Last year, Nissan made a similar move by ceasing production in Indonesia and Spain and increasing its production capacity in Thailand.
“The realization by global automakers to diversify the supply chain and reduce concentration in China has acted in favor of Thailand. With over 16 OEMs presently having production plants, Thailand is already a key production hub in Asia. Further, with an aim to be a global production hub, the government is offering attractive relocation benefits and policy packages, making Thailand the most eligible production hub in the region after China.”
Ford’s investment will support the production of its Ranger pickup due for launch in mid-2022 and the Everest SUV – top selling products in key Asian and global markets. With this, the company seems well on track to simplify operations and focus on core products to improve profitability and redirect investments to more lucrative global EV market.
Agwan concludes: “While the initial plan revolves around core SUV products, EVs production may come into play soon due to Thailand’s own strategic priority and Ford Motor focusing on the country’s market presently. The country aims to be an EV production hub by 2035 offering attractive Thailand Board of Investment (BOI) packages for local EV and component manufacturing.”
