Ford Pledges to Ride Out Thailand’s Political Storm

Confident Thailand’s automotive industry eventually will recover from the long-running political crisis gripping Bangkok, Ford says it is in the Southeast Asian country for the duration.

In the face of the instability, Thai vehicle sales fell from 1.4 million units in 2012 to 1.3 million last year and are forecast to drop to 1 million this year.

But Ford ASEAN President Matt Bradley tells a news conference the automaker has reaffirmed its commitment to the kingdom with its application to join Phase 2 of the country’s eco-car project.

“The first-car (tax-abatement) policy and the current political situation certainly curtailed consumer spending in the short term, but we don't see any long-term impact,” he says. “We stay committed to our plans and strategies for Thailand.

“We're confident in the stability of Thailand to maintain the vibrant automotive industry here.”

Thailand is being run by a caretaker government led by Prime Minister Yingluck Shinawatra after the Constitutional Court invalidated the results of a Feb. 2 general election because the vote was not completed within one day throughout the nation.

Yingluck had called the election after months of sometimes violent street protests had all but paralyzed her administration.

The Bangkok Post quotes Bradley as saying even though political turmoil has affected Thailand’s economy in terms of investment and consumer confidence, the country in the long term still will boast a competitive edge over its regional peers, given its established automotive fundamentals and support by the government.

The English-language The Nation newspaper reports Bradley declined to provide any details on Ford's eco-car project, including the startup schedule, planned models, production capacity and investment budget.

In exchange for tax and non-tax incentives, Phase 2 players must spend at least TB6.5 billion ($201.4 million) on a new plant and produce at least 100,000 units of low-fuel-consumption, low-emissions production vehicles in the fifth year after startup.

Bradley says Ford is confident it can meet eco-car project requirements that he says fit well with the automaker’s policy.

The Nation quotes Bradley as saying that during the past six years, Ford has spent $1.5 billion in Thailand and investments on that scale do not result from a short-term decision process.

Ford, he says, will continue to leverage Thailand as the production and export hub for the ASEAN region and elsewhere. The trade bloc is made up of Brunei, Burma, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand and Vietnam.

Ford already exports about half of its Thai production to Australia, New Zealand, other ASEAN markets and elsewhere.

Ford sees ASEAN sales growing from 3.3 million units now to 5 million by 2020. ASEAN is part of the Asia-Pacific region that Ford expects to account for 60%-70% of the automaker’s growth in the next five years, he says.

The Bangkok Post says Ford, which entered Thailand in 1995, is ready to expand its production in Thailand into the small-car segment to meet the varying demands of ASEAN members as well as Australia and New Zealand.

“Thailand is now the major producer of Ford in ASEAN, outpacing the Vietnamese plant, which produces 20,000 units per year,” it quotes Bradley as saying.

Ford’s sales in ASEAN rose 8% last year to 96,000 units for a 3% market share. Its 51,200 deliveries in Thailand amounted to a 4% share in that country.