Hong Kong-listed Tan Chong International Ltd (TCIL) remains committed to producing Subaru vehicles in Thailand in early 2019, starting with the Subaru Forester.
Samson Chua, newly appointed general manager of TC Subaru Thailand, TCIL's distributor of Subaru cars in Thailand, said the company's plan to invest US$150 million (5.09 billion baht) to make 10,000 Subaru cars annually remains on track.
Subaru vehicle production in Southeast Asia is conducted at the completely knocked-down assembly plant for Tan Chong Motor Assemblies Sdn Bhd in Malaysia, which builds 15,000-16,000 units of the Subaru XV and Forester models a year.
Fuji Heavy Industries Ltd (FHI), the manufacturer of Subaru cars, earlier this year announced plans to form a joint venture in February with TC Manufacturing and Assembly Thailand Ltd (TCMA), a subsidiary of TCIL, to start production of Subaru vehicles in Thailand.
With a view to enhancing Subaru's competitiveness and continued growth in Southeast Asia, FHI has decided to start production in Thailand through a joint venture company, Tan Chong Subaru Automotive Thailand Ltd, 74.9% of which will be owned by TCMA and the rest by FHI.
Production in Malaysia will continue, and Tan Chong International will sell the vehicles produced both in Malaysia and Thailand through its Subaru dealership network.
For its midterm management vision, Prominence 2020, announced on May 9, 2014, FHI laid out initiatives to develop a strong business foundation in Southeast Asia, with the joint venture established to advance that goal.
Mr Chua said the two facilities will operate in parallel from 2019 onward to serve Asean.
Singapore-based TCIL itself will proceed on a step-by-step basis to determine other Subaru models to be assembled at the two plants.
The Subaru assembly plant will be situated in Bangkok's Lat Krabang Industrial Estate, where TCIL now makes big trucks.
"This is the first joint venture between the two companies, emphasising how important the Southeast Asian market is," Mr Chua said.
TCIL now holds a distribution licence from Tokyo-based FHI to sell Subaru vehicles not only in Thailand, but also in Cambodia, Hong Kong, Indonesia, Malaysia, the Philippines, southern China, Singapore, Taiwan and Vietnam via more than 120 outlets.
Subaru posted sales in Thailand of 3,318 cars in 2016, up 25.6% year-on-year. Its sales target for 2017 is 3,200 units.
But for the first five months of 2017, Subaru car sales reportedly dropped by 32.2% year-on-year to 761 units.
Senior manager Tawan Khamrit said the sales drop was largely from a delay in resupplying Malaysia-made Subaru XVs, the company's best-selling vehicles.
"I think sales are unlikely to hit the 3,200 target this year," he said. "But we strongly believe that sales will pick up next year, thanks to the introduction of the new XV at the Thailand International Motor Expo in November."