Ceva Logistics has chosen a difficult time to sign a new contract with Isuzu Motors for warehousing and shipping services in Thailand as the economic downturn reaches the country.
The agreement covers outbound logistics for Isuzu’s knockdown assembly at the company’s facility near the Eastern Seaboard Industrial Estate, 120km south-east of Bangkok and close to Lamchabang seaport. It includes receiving, wrapping and packing truck parts for the I-190 pick up. Ceva will also manage the packaging and shipping of vehicles to countries around the globe, including South Africa, Egypt, Ecuador, Kenya and Japan. According to Ceva, the number of Isuzu vehicles exported from Thailand will reach 65,000 a year. However, Isuzu says it will struggle to export 60,000 as demand is hit by the global downturn and the Thailand Automotive Institute reports that production could drop by as much as 35 per cent as major export markets in the West deteriorate. Looking at the knock-on affects, the Auto Parts Club of the Federation of Thai Industries says almost 50,000 people working in the automotive parts industry could lose their jobs next year as exports slow.
Isuzu operates two plants in Thailand. The Samrong plant near Bangkok and the Eastern Seaboard plant (which Ceva helped relocate from Isuzu’s former Gateway plant at Chachoengsao). The Japanese truckmaker has just scrapped plans to add a new assembly line for pick-up truck production at the Eastern Seaboard plant, which would have boosted production at the plant by 100,000. Meanwhile, production at the Samrong plant has been cut by 20 per cent.
Isuzu needs to prevent exports dropping by more than 20 per cent in order to preserve jobs at its 4,000-strong Thai operation, which includes an automotive parts unit.
