Ford shuts shop in Japan and Indonesia

DECLINING market share and the need for sustainable sales has forced Ford Motor Company out of the ultra-competitive Japanese and Indonesian new-car markets.

Ford announced that it will close all operations in Japan and Indonesia before the end of this year as it sees “no reasonable path to achieve sales growth or sustained profitability” in the face of dominant Japanese brands and small market share.

The brand sold about 5000 vehicles through its 52 Japanese dealerships and 6000 units (half its tally from the previous year) from 44 dealers in Indonesia in 2015, representing market shares of well under two per cent.

The American car-maker has 292 employees in Japan – where it has sold vehicles for more than four decades – and 35 employees in Indonesia, where it has been in the new-vehicle market for just over 13 years.

Ford Asia Pacific vice-president of communications Karen Hampton said the brand was aggressively restructuring in areas where market dynamics required – Japan’s market is dominated by its local manufacturers and imports represent around six per cent of the market.

“After pursuing every possible option, it has become clear that there is no path to sustained profitability, nor will there be an acceptable return over time from our investments in Japan or Indonesia,” she said.

“Therefore, we will cease all operations in these markets before the end of 2016 and concentrate our resources elsewhere.”

Ford said it “remains committed to serving global markets” and China’s record sales for the Blue Oval would warrant more resources. Last year Ford recorded sales of 1,115,124 vehicles in China, up three per cent over the previous year.

Ms Hampton said the company would relocate any Japanese product development work to other regions and was communicating the decision to its customers, detailing plans for ongoing servicing, spare parts and warranty support following the closures.

Ford’s decision follows General Motors’ withdrawal from Indonesia last year in the face of strong competition from Japanese brands, resulting in 500 job losses.

Ford will also close its Australian manufacturing operations after more than 90 years of operation, leaving 850 staff in Melbourne and Geelong without jobs Holden and Toyota will follow, closing their Australian manufacturing plants in late 2017.