Auto Alliance Thailand (AAT), the 50-50 joint venture of Ford Motor and Mazda Corp, opened its new $500-million compact car plant yesterday aimed at positioning Thailand as a global manufacturing hub for the two international automakers.

The expansion, which brought AAT's investments in Thailand to $1.5 billion (51 billion baht), was completed without delay despite the world's automotive industry's skid since 2007 when the investment was announced, said David Alden, the president of Ford ASEAN.

"The economic downturn has presented a widely followed myriad of challenges to the global auto industry and it has considerably affected the export-driven economies of Asia," he said.

"But demand for smaller, more fuel-efficient passenger vehicles continues to explode around the world. This new passenger-car facility will help fulfil our global strategy to produce and market the types of vehicles that people want to own and drive."

Once operational in the fourth quarter, AAT's production capacity will increase to 275,000 units per year from 175,000. The new plant, which will primarily serve export markets, will initially produce the Ford Fiesta and Mazda2 compact cars as well as supplement existing production of Ford Ranger and Mazda BT-50 pickup trucks.

The new models will be exported across ASEAN, as well as to Australia, New Zealand and South Africa. AAT exports to more than 130 markets.

"This underscores the significance of our regional operation for AAT and its strategic role as a global manufacturing and export hub," he said. "The ASEAN region is a critical component of our overall growth strategy in Asia and the further diversification of products manufactured at AAT will be a fundamental driver of this growth."

Masaharu Yamaki, Mazda's executive vice-president, said AAT has proven to be a successful venture between the US-based Ford and the Japanese automaker.

"I have every confidence this partnership will enable us to overcome the current market challenges and lead us to further business growth," he said.

The new plant, once fully operational, will create 2,000 new jobs in addition to the 3,000 staff currently employed by AAT.

Mr Alden said the new compact models produced at the Rayong plant would compete head-on with the Honda Jazz and City, as well as the Toyota Yaris and Vios. He declined to detail possible pricing on the models.

Toyota, the world's largest automaker, and Honda, Japan's second-largest carmaker, dominate the Thai compact-car segment with 80% of sales.

In ASEAN, Ford and Mazda have a combined market share of less than 5% in this segment, with overall volume of 200,000 units a year, Mr Alden said.

An assembly line at a new plant in Rayong, which will primarily serve export markets, initially producing the Ford Fiesta and Mazda2 compact cars as well as supplementing AAT's current production of Ford Ranger and Mazda BT-50 pickups.