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30 Jun 10 15:37
Thailand Lure Investment Despite April/May Turmoil
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Workers are presently building a Ford car manufacturing facility in Rayong province, Thailand. According the to Ford the new factory will cost $450 million and will create 11,000 jobs at the plant which will be completed in 2012,

And next Ford’s vehicle future factory, Suzuki Automobiles, of Japan, is building its first Thai car manufacturing plant.

Over the past decade, pineapple orchards in the hills and valleys on the eastern seaboard have given way to auto assembly plants and their suppliers. BMW, Toyota, Mitsubishi, General Motors, Nissan and Honda all have major operations there.

“The automotive industry in Thailand is upbeat,” said Hajime Yamamoto, Thailand director for CSM Worldwide, an automotive market forecasting company based in Detroit. “Many suppliers have already reached 100 percent capacity.”

Car production in Thailand this year is expected to jump a stunning 60 percent, according to Vallop Tiasiri, the president of Thailand Automotive Institute, a government research organization.

Thailand, which Mr Vallop expects to produce 1.6 million vehicles this year, will maintain its place as the third-largest car exporter in Asia, after Japan and South Korea.

"This industry is a long-term investment," Mr. Vallop said. "Everyone is thinking that Asia is going to be a big car market, and Thailand is one of the best manufacturing centers for cars due to its geographical location.”

Ford says about 85 % of the cars to be produced in its new factory will be exported. It describes Thailand as "a global production and export hub."

Over the past four and a half years, Thai politics have been a PR nightmare for those in the government who are trying to smooth over the country’s image as an investment destination. Rising hostility between supporters and opponents of the then prime minister, Thaksin Shinawatra, led to a military coup in September 2006. It was followed by intermittent turmoil that included the takeover of Bangkok’s two international airports; the raiding by protesters of a major international conference in April 2009, which sent Asian leaders fleeing for safety; and the street protests in Bangkok that ended with the military violent crackdown last month.

In spite of all this the The Thai economy, driven largely by exports, has performed well. Exports in May were 42 percent up from a year earlier — when the U.S. financial crisis depressed sales — after a 35 percent jump in April. The government forecasts total economic growth this year at 4.5 percent to 6 percent.

Cars and electronics are two of the main export industries. More than half of the cars produced here will be sold abroad this year, mainly to Southeast Asia, Australia and the Middle East.

But Thailand’s location at the heart of mainland Southeast Asia, its reliable electricity supply and, perhaps most important, the economies of scale for component supplies resulting from a decade and a half of auto industry investment and growth appear to have sealed the loyalty of Ford and its competitors.

Mr. Yamamoto, the automotive analyst, said auto companies were drawn to Thailand by the diligent work force and relatively low cost. Compared with China, “there is less pressure on wages,” he said. Foreign car makers in Thailand also have fewer fears about intellectual property than those in China. “They like Thailand because they don’t fear the technology will be stolen,” Mr. Yamamoto said.
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