Suzuki has decided that Ford should be the ones to buy over their plant in Rayong, Thailand.
The automotive industry is going through massive shifts. Yesterday we learnt that Nissan would be selling their South African plant to Chery. Today we learn that Suzuki is selling their Thailand plant to Ford. This particular deal was actually finalized a few days ago and it will see the end of Suzuki’s production in Thailand after a year of rumours. Ford will pay US$3.9 billion over 30 years to use the facility to expand production of its Ranger and Everest models.
Conveniently, the Suzuki facility sits directly adjacent to Ford Thailand Manufacturing, which is the heart of the Blue Oval’s base in the region. The Suzuki factory consists of a 65,000 square metre factory space on a 163-acre plot of land. This move will support the “Ford+” plan which involves adding flexibility to the existing production network of Ford and Auto Alliance Thailand.
According to reports, Japanese firms are losing ground to Chinese automakers in Thailand at an alarming rate. In 2020, close to 90% of TIV in Thailand consisted of Japanese makes but last year it was below 70%. However, Suzuki’s woes in Thailand go back more than a decade. The factory in Rayong was initially set up to push out models like the Swift, Ciaz and Celerio in order to comply with Thailand’s then new ‘eco-car’ project, that set favourable taxation for low emissions vehicles. Instead, over the years, Chinese EVs have displaced small Japanese vehicles in Thailand.
The factory had a production capacity of 60,000 units a year but by 2024 it was only producing 4,400 units – only 10% of what it ought to have been able to do. Suzuki is therefore withdrawing from production in Thailand, with CKD operations being focused in Indonesia and India. In Thailand, Suzuki Motor Thailand will remain, but will shift completely to importing CBU models from Japan, India and Indonesia. It will also introduce new hybrid models to keep with the country’s carbon neutrality goals.
Interestingly, Ford is still doing relatively well in Thailand. The Rayong plant is key to Ford’s ability to sell the Ranger in ASEAN, Australia and New Zealand.
