Ford eyes Indonesia to boost Asia output, sales
Photo credit: REUTERS
Reprints
Print
Respond
BANGKOK -- Ford Motor Co. is eyeing Indonesia as a production center to help meet strong demand for cars in Southeast Asia but supply problems mean Thailand will remain its regional manufacturing hub for the foreseeable future, company executives said today.
More than 90 percent of Ford's production for the 10 countries of the Association of South East Asian Nations is in Thailand, where the automaker formally opened a $450 million manufacturing plant earlier today.
Ford also has small operations in Vietnam and the Philippines.
"Everyone in Thailand is trying to operate at maximum capacity and beyond now because the demand in Thailand and across ASEAN for products is very high. All of the markets are running strong," Ford ASEAN President Peter Fleet told reporters in Bangkok.
Many carmakers are eyeing Indonesia as an alternative production base and Ford is studying its options there, but the lack of an established supply base means its focus will remain on Thailand for now.
"The Thai market is still slightly larger than Indonesia, although we expect the Indonesian market to be bigger than the Thai market shortly," said Joe Hinrichs, president of Ford Asia Pacific and Africa.
"We think Indonesia has great potential and is an important market for us with the strong growth last year with the Fiesta," he added.
New plant
Ford's production was hurt by Thailand's worst flooding in almost 70 years last October, causing losses of more than $80 million, Hinrichs said.
Although Ford's joint venture with Mazda Motor Corp. in the eastern Thai province of Rayong suffered no damage, it was forced to suspend production in October due to disruption to the supply of components.
Hinrichs said the factory was now close to its pre-flood production level for the Fiesta model, while output of the Ranger was in line with plans.
Ford's production was hurt by Thailand's worst flooding in almost 70 years last October, causing losses of more than $80 million, Hinrichs said.
"We lost a lot of production in the fourth quarter and coming into the first quarter, we still felt the languishing effects of that," Hinrichs said. "But it hasn't changed our fundamental strategy, which is our commitment to Thailand, as an export and manufacturing hub."
The Asia Pacific and Africa business posted an operating loss of $95 million in the three months ended March, compared with $33 million profit a year earlier. That followed a loss of $83 million and $43 million in the fourth and third quarter last year respectively.
Thailand's total car production rose 11 percent to a record 190,935 units in March from a year earlier, according to the Federation of Thai Industries.
The new Ford plant has an initial capacity of 150,000 vehicles per year, boosting Ford's production capacity in Thailand, including an existing plant in the same area, to 445,000 vehicles.
It will concentrate on the production of the Focus and Echo Sport models.
The addition will help expand global sales to 8 million units by 2015, Ford said.
The new factory presents a "sizable export" opportunity, Hinrichs said.
The Focus made in the plant will be exported to ASEAN countries, Australia and New Zealand, he said.
The Rayong plant is one of eight new factories Ford aims to open across Asia-Pacific and Africa under a mid-term plan ending in 2015.
The region accounted for about 7.5 percent of the automaker's first-quarter revenue, according to data compiled by Bloomberg.
Reuters and Bloomberg contributed to this report
Contact Automotive News
