China’s Largest Automaker Planning Second Thai Plant

SAIC is making plans for a second assembly plant in Thailand before the first facility opens.

The SAIC-Charoen Pokphand Group joint venture’s TB9 billion ($285 million) plant is due to start operations in February at the Hemaraj Eastern Seaboard Industrial Estate in Rayong, 110 miles (180 km) southwest of Bangkok.

SAIC, China’s largest automaker, holds a 51% stake in SAIC Motor-CP, with CP owning 49%.

First-year production at the plant will be about 2,000 units, growing to 50,000 a year, mainly of the British brand MG, which SAIC bought in 2005.

SAIC-CP Chief Financial Officer Amnouy Sirijansawang says the MG6 sedan will be the first model made at its Thai facility. The MG6 is due to launch in third-quarter 2014. Amnouy says the JV also plans to expand production to include MG3 and MG5 mini-hatchbacks.

The Bangkok Post reports the JV is conducting a feasibility study about investing in a second plant in Thailand, with SAIC planning to make the country its manufacturing base for right-hand-drive vehicles for local and export markets.

The JV aims to export from Thailand to right-hand-driving countries such as Malaysia, Singapore, Indonesia, Australia, New Zealand and the U.K.

“The second assembly plant will be established in Chon Buri or Rayong, perhaps, which are close to auto-parts suppliers and the Laem Chabang deep-sea port,” an unnamed CP source tells the newspaper. “More details will be available once the first plant runs at full capacity.”

He says the second plant would raise the JV’s production to 150,000-200,000 units a year.

SAIC-CP President Wu Huan says an investment plan for the second plant has not been completed and no investment details will be disclosed until after the first plant reaches maximum capacity, likely in three to five years.

SAIC has four car brands, annual production and sales of 4 million vehicles, six plants in China and one in the U.K.

CP and SAIC have a business partnership spanning more than 27 years that began with joint production of motorcycles and air compressors for cars. CP also has operated its businesses in China for more than 33 years and widely is recognized within the country, which the Thai company says is a major reason why SAIC chose it as its partner.