In a rather shocking turn of events, Ford has announced that it will end all its business and operations in Japan and Indonesia this year.
Unlike other Asia-Pacific markets, the Blue Oval said that there’s “no reasonable path to profitability” in those two countries where it has struggled to gain market share.
As a result, Ford will terminate all of its activities in Japan and Indonesia, including shutting down dealerships and stopping sales and imports of Ford and Lincoln vehicles. Product development carried out in Japan will also be shifted elsewhere.
“Unfortunately, this also means that our team members based in Japan and Indonesia will no longer work for Ford Japan or Ford Indonesia following the closures,” said Asia-Pacific President Dave Schoch who wrote in an email regarding the decision that was sent to all employees in the region.
Ford follows the footsteps of General Motors which last year decided to stop making GM-branded cars in Indonesia. This has caused the loss of 500 jobs – amid intense competition from Japanese rivals.
In Indonesia, where it entered the market in 2002, Ford has a staff of 35 and sells through 44 franchised dealerships. Last year, it sold around 6,000 vehicles, taking a 0.6% share of the total new car market in a country struggling from economic slowdown. Plus, without local manufacturing, Ford has a tough time competing in the Indonesian market.
Meanwhile, Ford began selling cars in Japan since 1974 and to date has 52 dealerships in the country, employing 292 people. Last year, it sold around 5,000 vehicles in Japan and held a share of around 1.5% of the imported new car market.
The company has also had a tough time selling its Fiestas, Mustangs and Explorers in the Japanese market, which is largely dominated by Toyota, Honda, Nissan Motor and other domestic brands.
On top of that, vehicle sales have been falling in Japan as the population ages and demand for cars by young people decreases.
Source: via Reuters
