Ford to buy 60 billion baht of Thai made parts per year

Ford to buy 60 billion baht of Thai made parts per year

Things look good for the Detroit of the East, a nickname given to our neighbour Thailand. New models are on the way, more factories are being built and figures are up. Now Bangkok Post reports that Ford has committed to buy nearly $2 billion or 60 billion baht worth of locally made parts per year, once its new plant in Rayong starts operating next year.

This is a separate factory from the AutoAlliance Thailand (AAT) Rayong plant, in which Ford and Mazda are equal partners. The 60b figure includes purchases by AAT, which rolls out the current Ford Ranger, Ford Fiesta and Mazda 2.

In a statement that will make its host happy, the US brand said its expansion in Thailand would create 33,000 local jobs. Of this total, 8,500 will be directly employed by Ford and 25,000 indirectly through Ford’s suppliers and dealers. The company is the second largest automotive investor in Thailand, with $2.5 billion brought in to date.

Ford to buy 60 billion baht of Thai made parts per year

Allan Mulally, president and CEO of FoMoCo, reiterated that Thailand was a critical component of Ford’s Asia strategy. Our region is expected to account for 40% of global auto industry growth over the next five to seven years, and Thailand is now the world’s 12th largest auto producer in terms of volume, but is expected to get into the top 10 by 2014.

Mulally was in the Land of Smiles to grace the Job 1 Ceremony or start of production of the new Ford Ranger pickup truck. Thailand will be one of three global production and export hubs for the Ranger, the others being South Africa and Argentina.

It looks good, and it’s scheduled to reach Malaysia next year – read our preview of the new Ranger here and view the gallery from the Bangkok Motor Show here.

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Danny Tan

Danny Tan loves driving as much as he loves a certain herbal meat soup, and sweet engine music as much as drum beats. He has been in the auto industry since 2006, previously filling the pages of two motoring magazines before joining this website. Enjoys detailing the experience more than the technical details.

 

Comments

  • squawk on Sep 29, 2011 at 12:12 pm

    Don’t they just love slapping our faces with this sort of news?

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    • Ford Fiesta ST Ecoboost on Sep 29, 2011 at 12:52 pm

      lebih baik improve ford sc kat malaysia dulu…

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    • lonelyobserve on Sep 29, 2011 at 12:57 pm

      No. This is a slap to current Boleh Land government who keeps protecting national cars.

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      • nationalist on Sep 29, 2011 at 1:51 pm

        you have to sympathize with p1, they were showing some signs of improvement until their powerful advisor returned to the driving seat. an advisor so powerful no-one can say no to, and who promptly poured money into a long shot overseas ventures. don’t think anyone can do anything about this not even the pm, let along p1 management and staff. so lay off p1, that’s nothing anybody can do for them now.

        but p2, that’s a different story, where did it spend its windfall profits? while everyone is bashing p1, p2 had a free run, and what did the country end up with? clones, which p2 unashamedly declare they spent ‘millions’ to design. just look at the current viva, an old model, the daihatsu replacment came out just as the viva did, it’s one generation old, and an awful car for its price

        if p2 had focused on small cars, then it wouldn’t have to hobble the viva (or whatever small car they might have produced) so that they can differentiate it from the myvi. they would have made the small car the best in the world, to be able to compete against even higher end models. but no, p2 went upmarket to cannibalized p1 sales but producing just a SLIGHTLY better packaged product or perceived to be. p2 can do so easily because it had toyota behind it.

        what to do about p2? they must be tasked to return to their roots. to design and manufacture the best, small car in the world. now, you p2 people here, don’t go bad mouthing p1 because you think i am a p1 supporter. i am not, i write like this because i am a p2 customer.

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      • MoFaz on Sep 29, 2011 at 3:26 pm

        I don’t think they will come here even if you change gov to PR. try it and see.
        Our political situation is actually more ‘stable’ compared to Thai and Indonesia. Coup could happen anytime in Thai and they could just change policy overnight, like how they cancelled the sale of 300,000 tonne of rice to Indonesia. If they want the most politically-stable country in Asean, they could choose Singapore or Brunei, but why don’t they? let’s try put political factor aside and look at economical reason, which I think is the most important factor for their decisions. Think why they choose Thai and Indonesia?
        1. A large volume manufacturers need cheap labours. Salary in those factories are just around RM700. How many workers can they get in Malaysia with that level of pay? Even Perodua had difficulties to find labours here. Thailand has more than double our population while Indonesia has 10 times more than us, they can provide more workforce than Malaysia. Malaysia currently has more than 2 mil foreign workers with large amount of Bangladeshis and Nepalese work in factories. It’s a clear indication that Malaysia couldn’t provide cheap labours. Malaysia is now drafting the minimum income law. let’s say minimum is RM1000 here, so Ford need to pay RM300 extra per worker which easily translated to extra expenditure of RM9.9mil in a month or almost RM120mil in a year to pay to 33,000 workers.
        2. The ‘cheap’ car makers need volume, but our vehicle market is almost saturated. Malaysia is the 2nd highest vehicle-to-population ratio in Asean after Brunei. According to ” List of countries by vehicles per capita”, in 2008, Malaysia has 334 vehicles / 1000 people which is double than the next highest (Thai). Compare this with vehicle-to-population in;

        Thailand: 165/1000
        Indonesia: 77/1000
        Philippines: 33/1000
        Vietnam: 13/1000
        Myanmar: 7/1000

        I took a data from MAA, from 2005 up till June 2011, about 3.1 mil cars registered Malaysia. that’s 1 car (of less than 7 years old) per 5 person (age between 15-64). Based on the salary and market saturation alone, it’s no suprise why they choose Thailand or Indonesia over Malaysia. Only high-end marque such as BMW, Merc, & Peogeout could absorb the high salary cost in Malaysia as they produce less car and employ less people but higher profit rate per car.

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        • wallstreet on Sep 29, 2011 at 4:36 pm

          Err…this is 2011 and please don’t bring in your “Umma” political crap here again. How many AP did ‘Mofaz’ got per year?
          http://www.youtube.com/watch?v=-irLfwBP2OM

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          • MoFaz on Sep 29, 2011 at 4:43 pm

            if i have AP, i won’t bother reading paultan. i’ll rather enjoy my ferrari and drive around malaysia, venture into more business rather than talking to more & more useless bashers that keep coming up every day.

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          • Wallstreet on Sep 29, 2011 at 7:32 pm

            Err..I m not talking about u. I m referring to Mofaz who sell AP and imported cars.

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        • sukasuki on Sep 29, 2011 at 5:47 pm

          if u think wisely, does NAP do effect those automotive makers to invest in Malaysia? i think its more about “cheap labour” factor. if it because NAP, why BMW and Volkswagen choose Malaysia as their ASEAN hub? why dont choose Indonesia, Thailand, Vietnam? haiya Expatriate VN, wallstreet, please be open minded, and analyze carefully. dont be such as org lpas SPM berlagak tau suma bnda laaa. haiyaa. more you talk the more ur stupidity shown.

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          • Wallstreet on Sep 29, 2011 at 7:54 pm

            Ya lor, what to do…9As in SPM also can’t get into local U. Others who cant even get an A also can get in easily, graduated and yet can’t even spell
            N-E-W E-C-O-N-O-M-I-C P-O-L-I-C-Y

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      • Expatriate VN on Sep 29, 2011 at 4:11 pm

        The biggest jokes in our Bolehland are NAP, crony’s vendors and AP King. As usual, this MooFart chap tried to employ “divert attention” tactic by crap about others like salary and population issues. If they consider worker salary alone, why Toyota and Honda still open factories in their own country and US, which is way much higher than Bodohland?

        Why most of world class player, instead of pay attention at Indon and Thai, not open factories say at Bangla (140 Million population) and Vietnam (88 Million population), in which their salary is way below Indon or Thai. Just quote how much VN salaries scale, general worker (USD 100 per month), U graduates experience secretary (USD 150 to USD 200 per month), Engineers (USD 400 to USD 600), Manager level (USD 600 to USD 1,200), etc. In Malaysia it is 2 to 4 time more. Why don’t ask P1 set up new factory say at Bangladesh or Vietnam, and become new jaguh kampong over-there?

        The cheap car need volume (i.e. read here as must set up factory in countries with more population)? That another bullshit crap! This katak di bawah tempurung argument doesn’t hold! 1st – so by so P1 need to shut down Tg Malim plant because Bodohland don’t have volume for cheap shitty car? Or this idiot MooFart has no knowledge on import/export or logistics matter? This never ending argument ……………………

        But you retard blind supporter haven’t answer my one simple question, show me evident(s), which car manufacturing countries in the world formulate NAP like protective policy that become a breeding ground for cronies vendors and AP Kings (e.g. facts – 1 AP King pass away, another 1 AP Queen was kicked out from cabinet after GE12) to suck dry consumers until the last drop of blood????? Does Japan, US, Korea have AP Kings and cronies vendors???? Don’t go for another “divert attention” tactic argument about protective Korean car industry also facing same shitty car problems, etc, etc, ……

        Ha, ha, these are the real issues that piss off world class car manufacturers ……. as far as you can’t give evident(s), you are just farting methane, CH4.

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        • MoFaz on Sep 29, 2011 at 4:41 pm

          we’re here to share opinions, if you disagree, could you please give your opinion in respectable manners?
          what kind of benefit do you get for rambling and bashing here?
          and what’s up with name-calling game? do you think i’m a 7-yrs old kid like you?
          I guess the real Malaysian would still have ‘sopan santun’ as their culture, but Vietnamese like you would only know how to shoot people.
          I won’t bother about your question, no point to repeat the same thing and explain to ‘kepala batu’

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          • Expatriate VN on Sep 29, 2011 at 5:32 pm

            This retard MooFart attack dog, once mentioned about cronies vendors & AP King issues, quickly chicken out and run like headless chicken …………………

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          • MoFaz on Sep 29, 2011 at 6:15 pm

            guess what will happen once open AP is implemented? anybody can import any car he/she like. if you want toyota car, u don’t have to buy from toyota but you can import directly yourself. The franchise AP holders like UMW Toyota, Sime Darby and Honda are worried about this. They affraid that people won’t buy from them because it’s cheaper to import yourself, thus reducing their profit. So they asked gov to limit the open AP.
            how convenient for you to put the blame on “AP King” while UMW, Sime Darby, Honda also hold AP. I’m not defending the AP KIng. But I support the open AP concept, just like COE in Singapore.

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          • Mofaz, think u have all the facts wrong. vw or merc did not invest in malaysia. they just outsource some of their ckd to malaysia as matter of social reasons. but in thailand and indonesia, they invested heavily. though thailand has many coups, their policies seldom change, in fact i have not heard of them changing policy compared to malaysia flip-flopping every now and than. worst still they have many protecting policies which frighten them off.

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        • Bangladesh isn’t in ASEAN besides they can just import cars from neighboring India. ASEAN FTA anyone?

          Thailand got decades long of auto policy to support car makers opening factory there but this does not qualify with Vietnam as they didn’t have one and are still in maturing stage with infra and nation building. Give them 10 years even Toyota will set up factory there.

          For Indonesia, the market is so huge itself that car makers couldn’t ignore even Indonesian government herself doesn’t support auto industry like Thailand did. Plus the wage is much lower than Thailand.

          For AP and sub-par quality vendors, I somehow agreed with exception if they improves over time and stop leeching the system until ever after.

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  • inspirasi on Sep 29, 2011 at 12:28 pm

    yes!!!

    malaysia boleh!!!

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  • Expatriate VN on Sep 29, 2011 at 12:33 pm

    “In a statement that will make its host happy, the US brand said its expansion in Thailand would create 33,000 local jobs. Of this total, 8,500 will be directly employed by Ford and 25,000 indirectly through Ford’s suppliers and dealers.”

    – Ho, ho, ho, ho, another “Santa Claus” descends to the “Land of Smile” for truly world class goodies! The Land of Smile is fully planted with Green Mountain of forest, whilst ours is still stuck with 1 dead wood stump!

    Let the Indon and Thai grab all the big players of the world!

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  • wallstreet on Sep 29, 2011 at 12:45 pm

    Perfect new…….for Thailand………that’s RM6 billion!! Damn it our G and Proton..

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  • Wow! USD2 bil is a big commitment. But dont worry Proton pun boleh bah! In fact, they can turn down VW JV even!

    Anyway, a message to Ford Malaysia – since the factory is just accross the border, please dont be like your friends UMW who screw consumers. We expect you to accord Malaysian consumers the same treatment & bring in at the same time the complete new Ford Ranger range (2.2, 3.2, Hi Rider etc) + full specs. Ford salesmen tell me that only the 2.2 will be launched first locally.

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  • profiler on Sep 29, 2011 at 3:03 pm

    Thailand is ranked 12….. what are we doin here in Malaysia…… Malaysia Boleh ka Malaysia tak boleh!!!

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    • MoFaz on Sep 29, 2011 at 4:08 pm

      Malaysia is one of the world’s largest exporters of electrical & electronic (E&E) components and ICT products. Computers accessories and telecommunications equipment account for 52% of Malaysian exports. But how come the top contributor to Malaysia income is Oil & Gas? why not the E&E sectors?
      The answer is simple. Because Oil & Gas is Malaysia’s own product. We may manufacturer products for Intel, Dell, Samsung, and whatever… export it to US, Singapore and rest of the world, but those companies bring the money (profit) back to their countries. Same case with Japanese automakers in Thai. You can see how Japan and Korea improved tremendously after World-War with their products being exported around the world. But why it doesn’t produce the same impact in Thai as in Japan, even though Thai exports lots of Japanese products? The key point here is produce your own tech or brand rather than producing someone else’s. Seriously, if Proton managed to produce and export their cars around the world just as much as Thailand, we would see a much greater impact on our economy than what Thailand is experiencing now.

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      • tikus on Sep 29, 2011 at 6:56 pm

        Ones…Most big boys factory already move to other country.Matsushita refrigerator already move to Veitnam and etc…

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        • MoFaz on Sep 30, 2011 at 12:04 am

          yup, previously, we could get Dell laptop within days after we place our order but now we need to wait for weeks. Dell was previously in Penang, now they moved to China… and that’s exactly my point: we’re no longer able to supply cheap labour, and our own market is just not big enough.

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  • useless ford on Sep 29, 2011 at 4:31 pm

    lol. ford is a joke anyway. without the US gov protection policy, ford and GM wont even survive. but of cos they dont hav a specific policy like the NAP. and they do it under the table. no one buys a ford anyway in malaysia.

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    • MoFaz on Sep 29, 2011 at 5:07 pm

      that’s what i’ve been saying. we never know what happened in their country and under their table :)

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    • Malaysia got balls to do her policy openly for the world to see.
      Others just do it silently or between unwritten agreement.
      But one things bugging me is why Malaysia never got the warning or issues with WTO? Seems like it is a legal one and acceptable with other countries.

      Credits from me.

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      • MoFaz on Sep 30, 2011 at 12:06 am

        protectionism exists everywhere. that’s how Japan and Korea managed to be developed countries. that’s why USA rescued their Ford and GM with billions of dollars.

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    • dear ufs, please do some research before blasting out. ford did not secumb to and bailing out from the us goverment unlike gm or chrysler. they did well in overcoming the downturn. regret your comment badly reflecting on you. sigh!

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  • Dont worry guys…we can build Lynas in every state.

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  • Ash Menon on Oct 03, 2011 at 5:18 am

    33000 more jobs for Thailand. 33000 more butthurt comments on Paultan.

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