German automaker Daimler Commercial Vehicles Thailand is set to invest in a truck assembly facility in Chon Buri after ending a seven-year-long manufacturing relationship with Hong Kong-listed Tan Chong International Ltd.
Chief executive Sascha Ricanek said yesterday the company will invest in production infrastructure while hiring subcontractors to assemble Fuso trucks at the facility in Laem Chabang district. Production is expected to start by November with an annual capacity of 3,000 trucks.
The new production line will focus only on the Thai market. However, Mr Ricanek did not give any more details about the investment budget or the name of the subcontractor.
Fuso was owned by Japan's Mitsubishi Fuso Truck and Bus Corporation (MFTBC). Stuttgart-based Daimler AG acquired 89.3% of MFTBC in 2005, while Mitsubishi group companies own 10.7%.
In Thailand, Mitsubishi Fuso Truck used to run an assembly plant in Lat Krabang, but the company decided to close the plant and lay off 150 workers in 2009 after it was hit by the global financial crisis.
Tan Chong took over the facility from Mitsubishi Fuso Truck Thailand in late 2009 for a combined $30 million (1.02 billion baht) while FUSO Trucks Thailand, Tan Chong's subsidiary, took charge of the local distributor.
Mr Ricanek said the contract with Tan Chong expired in April 2016 after both parties failed to reach an agreement to renew the relationship.
Daimler established the local unit for commercial vehicles in August last year.
Mr Ricanek said the German company is strongly committed to the Thai market, adding the country's truck market has been very healthy for the past several years.
He forecasts the heavy-duty truck market will grow by 10% to 20,000 units this year, driven by the government's megaproject development.
In 2016, Thailand's commercial vehicles were dominated by Isuzu with 14,306 units and Hino with 12,713 units. Japan's UD Trucks, a part of Volvo Group, took third place from Fuso with 800 units sold, versus 766 for Fuso.
Other players are Western brands such as Scania, which sold 515 units, and Volvo (391).
Mr Ricanek anticipates selling Thailand-made Fusos from 2018 onward, aiming to sell 1,000 trucks per year. But he said sales this year will be limited because the company has just restarted its business locally and the current models are imported from India.
Fuso has eight dealers running 25 locations nationwide.
Mr Ricanek aims to expand to 60-70 locations over the next five years.