Local Mazda plant slashes overtime

Local Mazda plant slashes overtime

Chanchai Trakarnudomsuk, president of Mazda Sales Thailand, the local arm of the Japanese car maker.
Chanchai Trakarnudomsuk, president of Mazda Sales Thailand, the local arm of the Japanese car maker.

Mazda's operation in Thailand has reduced its overtime payments for local workers as it production plan for this year decreased in line with lower exports and domestic sales, attributed to the US-China trade war.

Mazda's production facility is in Rayong, operated by AutoAlliance Thailand (AAT), a joint venture with Ford that produces 270,000 vehicles per year.

Chanchai Trakarnudomsuk, president of Mazda Sales Thailand, the local arm of the Japanese car maker, said the lower overtime payments are because the company is reducing its car production.

"If we continue with the original plan, it will increase our inventory. The new plan aims to balance our car stock and demand both domestically and abroad," said Mr Chanchai, former executive vice-president of AAT.

"The other solution for the local market is to adjust our distribution plan and create opportunities for Mazda dealers to beef up sales in Thailand."

He said the country's automotive industry is suffering from the continuing trade war between two giant economies, lowering car exports and pulling down GDP growth.

The difficulty for the local market is auto loan rejections from banks, pressuring the industry for five months in a row.

"Mazda has to work closely with its bank partners to classify the profiles of car buyers to help applicants pass their conditions," said Mr Chanchai.

According to Mazda, the country's car sales from January to October stood at 840,000 units, unchanged from the same period last year.

Mazda posted sales for the period of 49,668 cars, declining by 13.5%. The company's market share stood at 6%.

Earlier, Mazda cut its overall market forecast for the country in 2019 from 1.06 million cars sold to 1.04 million and revised the 2019 sales outlook for Mazda to 65,000 cars, down from 75,000.

Mazda has less than two months to beef up local sales to meet the company's expectation, said Mr Chanchai.

"Although the local market has declined for five consecutive months, it can stay above 1 million cars sold, similar to 2018, if the current sales volume is stable."

Yesterday, Mazda introduced the Malaysian-assembled CX-8 as the third sport utility vehicle (SUV) in Thailand after the CX-5 and CX-3.

Only the CX-3 is made at the Rayong plant.

Mazda expects to sell 6,000 units of the CX-8 in the first year after the launch.

Mazda forecasts the overall SUV segment, including pickup-based SUVs, to grow 10% in 2019 from 151,000 units sold in 2018, driven by the growth of small- and midsized SUVs and pickup-based SUVs.

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