Ford has announced it will shutter its operations in Japan and in Indonesia.
The Detroit-based company has been struggling to sell cars in both Asian nations for the past couple of years, and executives admit they ultimately see “no reasonable path to profitability.” Ford will consequently shut down all of its divisions in those countries, including the small product development unit it runs in Japan and every single one of its franchised dealerships.
Ford entered the Japanese market in 1974, and its lineup is currently limited to the Fiesta, the Focus, the Mustang (pictured), a small crossover named Ecosport, the Escape (dubbed Kuga locally), and the Explorer. Its 52 dealerships sold just 5,000 cars last year, a figure that represents a 1.5-percent share of the imported new car market. Japanese competitors like Honda, Nissan, and Toyota dominate their home market.
The Blue Oval didn’t set up shop in Indonesia until 2002. The 44 Ford dealers scattered across Indonesia sold 6,000 cars last year, a figure that amounts to a paltry 0.6 percent share of the new car market. Analysts point out that every segment of the Indonesian economy has experienced a slowdown, but Ford isn’t big enough to take the hit without enduring massive financial losses.
“In Indonesia, without local manufacturing … there’s just really no way that automakers can compete in that market, and we do not have local manufacturing,” explained a Shanghai-based Ford spokeswoman in an interview with Reuters.
Ford will continue to honor warranties in both countries, and its dealerships will provide spare parts and service for years to come.
Ford rival General Motors decided to leave the Indonesian market last year, but Fiat-Chrysler Automobiles (FCA) remains committed to the country for the time being. Similarly, GM and FCA will keep investing in their respective Japanese divisions in the foreseeable future.