Auto Alliance (Thailand), a joint venture between Ford and Mazda, expects to start production of the Mazda2 in September and the Ford Fiesta in the first quarter of next year, following the official opening of its Bt17-billion plant in Rayong yesterday.

The facility will produce vehicles for the local market and also for export. Vehicles will be exported throughout ASEAN and to Australia, New Zealand and South Africa. AAT already exports pickups to more than 130 countries.

"The automotive world in 2007, when we announced the decision to invest in the new factory, was a significantly different place from today. Despite the turmoil currently afflicting the automotive industry, it is crucial that we invest in this factory, which will produce smaller fuel-efficient vehicles," said David Alden, president of Ford ASEAN.

"Our new factory underscores the significance of AAT for our regional operations. We are highly confident that demand for compact fuel-efficient passenger cars will steadily increase around the world, especially here in the Asia-Pacific region," said Masaharu Yamaki, executive vice president of Mazda Motor Corp.

The new plant is situated next to the company's other factory in Rayong and will produce B-segment cars for Ford and Mazda, namely the Ford Fiesta and Mazda 2. The first factory produces only pickups.

Her Royal Highness Princess Maha Chakri Sirindhorn presided over the opening ceremony yesterday, accompanied by US Ambassador Eric G John and Japanese Ambassador Kyoji Komachi.

The new facility will increase AAT's production capacity from 175,000 to 275,000 units per year.

The investment brings the total investment in AAT by Ford and Mazda to US$1.5 billion (Bt51.4 billion) since 1995.

The AAT factory currently employs 3,000 workers, as it produces at 60 per cent of its capacity. When maximum capacity is reached under the plan for the second facility, an additional 2,000 workers will be hired.

The Ford Fiesta and Mazda2 models will be in direct competition with the Toyota Yaris, Toyota Vios, Honda City and Honda Jazz.

Ford has only a 2-per-cent market share in ASEAN, which it plans to boost with the launch of the Fiesta next year. More than 200,000 B-segment cars are sold in the ASEAN region, which is dominated by Japanese auto-makers.