BANGKOK (Reuters) - The chief executive of Ford Motor Co F.N. complained on Tuesday about Japan’s devaluation of the yen and reiterated his opposition to Tokyo entering into free trade talks with the United States under an Asia-Pacific agreement.
The yen has fallen around 8 percent against the dollar this year, driven down by Tokyo’s fiscal and monetary policies.
“The markets should determine the exchange rate,” Ford CEO Alan Mulally told a small group of reporters in Bangkok, referring to what he said was “the devaluing of the yen”.
Ford has been vocal in opposing Japan’s entry into the talks for the Trans-Pacific Partnership (TTP), a U.S.-led Pacific free trade pact, until Tokyo opens its market to more U.S. cars.
“It’s the most closed automobile market in the world,” Mulally said, highlighting the combination of non-tariff barriers on vehicle imports and distribution.
“They should open up their market, they should restructure their industry, and that’s why we’re encouraging the people negotiating the free trade agreements that they deal with that.”
Japanese Prime Minister Shinzo Abe announced Japan’s interest in joining negotiations on the TPP earlier this month.
The countries involved in the TPP talks, Canada, Mexico and Australia among others, want a deal this year but Mulally is worried that Japan’s interest could slow down the process. Those countries could decide in April whether to allow Tokyo into the talks.
Matt Bradley, president of Ford ASEAN, reiterated that Thailand would remain its manufacturing hub for the Southeast Asian region.
Indonesia’s car-manufacturing sector is growing and it is expected to be the largest car market in ASEAN within five years. General Motors (GM.N) is restarting its factory there and expanding its dealership network.
Wages in Thailand are rising, a government subsidy for first-time car buyers has ended and the strength of the baht is cutting into exporters’ margins, but Ford will be staying the course.
“We have set up today our production and export hub in Thailand, we invested in and built a brand new plant last year, so our capacity today in Thailand is about 450,000 and that serves all of the ASEAN markets,” said Bradley.
“Clearly we’re going to continue to look at and study Indonesia. We do recognize the competition putting manufacturing footprints in there,” he said. But he added: “There are no concrete plans as of yet.”
More than 90 percent of Ford’s production for the 10 countries of ASEAN is in Thailand.
It expects one third of its global profits to come from the Asia-Pacific region by 2020.
Reporting by Paul Carsten; Editing by Alan Raybould and Jeremy Laurence