Ford to bid farewell to Japan, Indonesia markets

Ford to pull out of Japan, Indonesia
by Andrew Guerrero | Jan 27, 2016
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Ford to bid farewell to Indonesia, Japan markets

Ford Motor Company has announced that it will withdraw from the Japanese and Indonesian markets later this year. According to Ford's president of Asia Pacific David Schoch, it was a difficult decision to end operations in the two markets.

He pointed out that the American carmaker will stay committed to its "One Ford Plan of serving global markets profitably," and also added that the company is "committed to aggressively restructuring parts of its business, which have no reasonable path to profitability." The company exhausted all possible options for Japan and Indonesia, but none of the solutions would lead to profitability.

According to Ford, imported vehicles only make up 6% of Japan's total vehicle sales and the Trans-Pacific Partnership (TPP) will not improve the brand's competitiveness in the market. Although the Blue Oval firm did not elaborate on this, TPP would only affect US-sourced models in Ford's Japanese lineup, like the iconic Mustang, the Explorer and Lincoln luxury SUVs, all of which are high-end, low-volume niche vehicles. Ford's small mainstream models are sourced from Thailand, India, Germany and Spain.

The company decided to exit the Indonesian market because of the lack of local manufacturing, and the absence of models in key segments like AUVs and low-cost city cars. The Dearborn-based company only owns a dismal 0.6% of the Indonesian automotive market, and does not even compete in the popular automotive segments.

When Ford bids the two markets farewell, it will deal with its employees who will be affected. The current personnel in Japan and Indonesia will receive severance payments and outplacement support to help them transition to other jobs. As for its customers in the two markets, Schoch said that the company is committed to helping them by providing service, spare parts and warranty support for their vehicles.

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If you're a Ford owner in the Philippines, you need not worry. The automotive company's sales performance in the country--as well as in Vietnam and Cambodia--led the brand's growth in the ASEAN region last year. It's also now officially the third-best-selling automotive brand in our market, next only to Toyota and Mitsubishi.

 

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