Mazda budgets B1bn to refresh AAT plant

Mazda budgets B1bn to refresh AAT plant

Car maker upbeat on 2020 sales figures

The assembly line at a Mazda car production facility in Rayong. The facility is operated by AutoAlliance Thailand, a joint venture with Ford. (Photo by Piyachart Maikaew)
The assembly line at a Mazda car production facility in Rayong. The facility is operated by AutoAlliance Thailand, a joint venture with Ford. (Photo by Piyachart Maikaew)

Mazda Sales Thailand, the local arm of the Japanese car maker, plans to allocate roughly 1 billion baht to improve its local manufacturing site in Rayong for 2020.

The Rayong facility is operated by AutoAlliance Thailand (AAT), a joint venture with Ford that produces 270,000 vehicles a year.

With 50% ownership, Mazda has car production capacity of 135,000 units.

Chanchai Trakarnudomsuk, president of Mazda Sales Thailand, said the 2020 budget is to upgrade the jig and die tooling system at AAT.

"The output will serve both the domestic market and abroad," he said.

AAT produces four Mazda models: Mazda 2, Mazda 3, CX-3 and BT-50 Pro.

For the BT-50 Pro pickup, the model's life cycle ends soon and Mazda will no longer be able to make new-generation pickups at AAT.

Mazda signed a basic agreement with Japanese peer Isuzu in July 2016 to relocate its pickup production to Isuzu's facilities in Thailand.

In October, Isuzu debuted its new-generation pickup, the D-Max, with the Mazda BT-50 in line with the agreement.

Mr Chanchai declined to give a further update on the pickup agreement, nor a time frame for Mazda's new pickup to be introduced in the Thai market.

For 2019, Mazda expects to hit its local sales target of 65,000 cars, down 7.8% from a year earlier. Such a result would be the first decline in five years for Mazda sales in Thailand.

Mazda posted 49,668 cars sold in the first 10 months, down 13.5% from the same period last year. The brand captured a market share of 5.9% for the period.

Mr Chanchai said the local car market is quite unfavourable because of external factors: bearish exports and the baht's appreciation, as well as the continued trade war between the US and China.

"Mazda's sales dipped this year for many car models, running out for the new changes, so some models were not available in a couple of months," he said. "Thailand's car market saw a decline in the second half of 2019, so Mazda has to work with dealers on sales strategies in the final month."

Mr Chanchai said the car market in 2020 could reach 1 million units sold because the government's stimulus measures will be in place for a whole year.

"The measures are not only for grassroots people, but also to stimulate overall economic engines such as consumption and investment," he said. "The central bank's measures to control auto loan approvals from financial institutions will be postponed from a tentative plan to take effect in early 2020, so there is no worry for the lending sector."

Mr Chanchai said the worst-case scenario for the 2020 car market is 900,000 units sold.

"Mazda will announce its 2020 business plan in early January, and at least two new models will be introduced next year," he said.

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