Ford may build new car assembly in Indonesia 1

Ford are said to be considering building a brand new assembly plant in Indonesia. The company are clearly hoping to gain a larger stake in the emerging Asian market next year.

The Indonesian automotive market

Sales have increased by 17 % in Indonesia for Ford last year, selling a total of 893,240, which was an all-time record in the country. It is quite obvious to see that the Indonesian market shouldn’t be underestimated by any stretch of the imagination. Thanks to it’s strong performance last year in terms of sales, the company are now the top selling in the whole region. Although the Thai auto market figures have not been released but experts believe those sales will equate to 800,000 to 820,000 units. Some experts have even predicted that Indonesia may even overtake Thailand by the end of the year. The unfortunate floods in Thailand have made a huge impact in aiding Indonesia’s progress. The fourth quarter of last year in particular was indeed a drastically poor time for the Thai automotive market.

Why a plant wasn’t built before

Ford will use their production base in Thailand, where they have an Auto Alliance joint venture alongside Mazda. This is the location where the Fiesta subcompact is built along with the Ranger pickup truck. Further passenger vehicles are built here too, combining with other Ford assembly plants in the Philippines, Malaysia and Vietnam. There isn’t an assembly plant in Indonesia at the moment as the Government intervened with such plans back in 1996, thanks to a Timor national car program being implemented. Imported parts from the assembly plants mentioned earlier are the only option at present. Plans to build a new assembly plant in the country would help save costs and create more jobs too.

The Ford and Mazda partnership have recently prospered in the region recently. The Fiesta, developed and produced in Thailand helped Indonesian customers identify the car as a local one that suited them and their lifestyle. The Ford Ranger has also seen a sharp increase in demand recently.

Take into account that nothing has been confirmed as of yet. There are still plenty of clearances to go through.