Ford and Mazda to build Thai car plant

BANGKOK/TOKYO (Reuters) - Ford Motor Co F.N and Mazda Motor Corp 7261.T said they will build a second, $500 million plant in Thailand to produce 100,000 cars a year to meet the region's growing demand for small cars.

An employee works at the production line inside the Changan Ford Mazda Automobile Co. plant in China September 24, 2007. Ford Motor Co and Mazda Motor Corp said on Tuesday they would build a $500 million plant in Thailand to build up to 100,000 cars a year. REUTERS/Aly Song

The factory, to be constructed at the site of their existing pickup truck plant in the eastern province of Rayong, would produce the Mazda2/Demio subcompact car and an unnamed small Ford car based on the Mazda2’s platform, starting in 2009, the companies said on Tuesday.

“We expect demand for compact cars to grow in the Southeast Asian region,” Mazda President Hisakazu Imaki told a news conference in Hiroshima, monitored at the automaker’s Tokyo office.

“The construction of the new plant is a major step towards raising our global sales to 1.6 million vehicles by 2010,” he added. Mazda, owned one-third by Ford, sold 1.234 million vehicles in 2006.

The new factory would raise annual capacity of the partners’ AutoAlliance Thailand (AAT) joint venture to 275,000 vehicles.

The two automakers had been expected to announce plans to boost production in Thailand since Mazda executives said in March they had entered discussions with the Thai government on the issue.

The latest announcement follows the start last month of Ford and Mazda’s factory in Nanjing, China, held jointly with local partner Chongqing Changan Automobile Co. The 160,000 unit a year plant also builds the Mazda2 model.

Mazda and Ford would split the new investment in Thailand equally, they said.

The Mazda2 subcompact would be sold in Thailand and exported throughout Southeast Asia.

Ford said it had not decided yet on a specific model, but one executive said it would likely a car be based on the Verve concept car unveiled at last month’s auto show in Frankfurt. The same car, believed to be the basis for the next Fiesta, would also be manufactured in Nanjing, the executive said.

Up to 80 percent of the cars produced at the new plant would be exported, and use up to 60 percent local content, John Parker, Ford’s executive vice president for the Asia-Pacific region, told a news conference in Bangkok.

Mazda has said it aims to sell at least 130,000 Mazda2 cars a year globally. The car was remodeled in July.

Mazda’s shares gained 3 percent to end at 647 yen before the announcement, boosted by the dollar’s rise against the yen.