Mark Kaufman, President, Ford ASEAN: Interview

Mark Kaufman, President, Ford ASEAN

Interview: Mark Kaufman

How has the domestic slowdown in automotive demand impacted manufacturers, and in what timeframe do you expect recovery?

MARK KAUFMAN: We are expecting the slowdown in the domestic Thai automotive market to bottom out during the 2016 calendar year, with slow recovery to follow. The first-time car buyer tax rebate programme implemented by the previous government caused an upward spike in volumes in 2012; however, even a year or two ago, most in the industry anticipated a faster demand recovery than what has materialised. If we take a longer-term look at the sector, that year boosted the automotive industry well out of the norm, but many at the time expected those levels to continue rather than the large-scale pullback that has happened, although we must also factor in challenging economic conditions in recent years that were not necessarily anticipated. While we expect recovery to begin in 2016, the new CO taxation policy will impact the numbers to some extent, as prior to its implementation in January 2016 there was a fairly heavy boost to finish 2015, with spikes in industry volume as many consumers were aware that those tax policies would flow through to higher automotive prices.

How do you assess current investor sentiment in such an investment-heavy industry?

KAUFMAN: The export segment softens the blow of the domestic downward trend significantly as automotive demand in most South-east Asian countries continues to increase, with middle classes growing and populations increasing. Thai automotive exports have also been up overall. Of course, the first-car policy launched the automotive industry in Thailand to 2.45m units of production, and there is a certain level of investment that manufacturers made to reach that demand, causing an industry hangover as demand has ebbed. One encouraging sign is that the Southeast Asian market continues to be receptive to the pickup truck and SUV segments, with our Ranger and Everest models seeing especially positive consumer reception. To that end we invested $186m in one of our Thai production plants to produce incremental pickup truck volume to meet demand across the region. With Thai demand scheduled to recover and demand within the region booming, the nation continues to be an attractive investment destination for automotive manufacturing.

What advantages does Thailand have over other automotive manufacturing nations in the region?

KAUFMAN: As a general rule, automotive manufacturers like to establish their manufacturing footprints in the markets where they are selling the most units to build self-supported markets and achieve efficiency in logistics. Thailand has continued to be a sales volume leader for us, which is the main incentive for manufacturing here. At the inception of the automotive industry in Thailand, the government did an excellent job of working with business and setting up that manufacturing footprint, which meant many global manufacturers committed their investments here, along with a robust network of local parts suppliers. While the recent domestic industry pullback poses challenges, we continue to be encouraged by the Board of Investment and the government reaching out to the business sector to identify areas for improved support. As a large part of the automotive industry operates out of the eastern sea board, our public sector counterparts must continue investing to further improve infrastructure, helping remove bottlenecks both to the port and Bangkok and giving our employees and exports better access to and from manufacturing sites. Looking at the South-east Asian market over the long term, some factors to consider when determining manufacturing footprints will be how big specific markets get, what labour rates will be and the ease of working with the local workforce.

Anchor text: 
Mark Kaufman

You have reached the limit of premium articles you can view for free. 

Choose from the options below to purchase print or digital editions of our Reports. You can also purchase a website subscription giving you unlimited access to all of our Reports online for 12 months.

If you have already purchased this Report or have a website subscription, please login to continue.

The Report: Thailand 2016

Industry & Retail chapter from The Report: Thailand 2016

Cover of The Report: Thailand 2016

The Report

This article is from the Industry & Retail chapter of The Report: Thailand 2016 . Explore other chapters from this report.