Ford and Mazda to Invest in Thai JV - Analyst Blog

Ford Motor Co. (F) and Japan's Mazda Motor announced their plan to invest $350 million in their Auto Alliance joint venture (JV) plant in Rayong, Thailand. The investment will revamp the facility and help build a redesigned version of their compact pickup trucks from mid-2011.

However, the investment would not increase production capacity at the plant. In June this year, Auto Alliance has already enhanced the annual capacity of the plant from 100,000 units to 275,000 units by investing $450 million for a new plant.

The JV plant manufactures passenger cars, including Mazda2 and Ford Fiesta, and pick-up trucks, which are exported to more than 130 markets around the world.

Ford's investment in the Thai plant is a part of its major expansion plan in the emerging countries, including Argentina, Brazil, China, India and Thailand. The company aims to tap the growing market potential in the emerging countries, especially those in Asia.

According to Peter Fleet, Ford's president for the 10-country Association of South East Asian Nations (ASEAN), Asia is expected to account for 40% of growth in the auto industry over the next five to seven years.

Since last year, Ford has also invested $510 million in China and $500 million in India as part of its expansion plan. It intends to raise annual production capacity from 450,000 vehicles to 600,000 vehicles in China and double to 200,000 units-250,000 units in India from 2010.

Since the establishment of the JV in 1995, Ford and Mazda have invested a total of $1.85 billion in Thailand, including the new investment. Last year, the JV invested $500 million in Rayong.