Ford ceases operations in Indonesia and Japan

Ford dealership Giorgi Automotores Ford Motor Company has announced its intentions to ceae operations in Indonesia and Japan this year in light of falling market share and profitability in the two countries. Across the Asia and South East Asia regions, Ford has been struggling considerably to gain market share against several competitive marques, namely the Japanese counterparts.

With the unofficial announcement, Ford immediately will exit all areas of business, including shuttering dealerships and sales and imports of Ford vehicles. The source came from an email note from Ford’s Asia Pacific President Dave Schoch to all employees in the region. As for Product development, operations are expected to be carried out in Japan but to be shifted to another vicinity deemed more cost efficient.

Ford, one of Detroit’s “big three” automakers, follows in the footsteps of General Motors, which last year decided to stop making GM-branded cars in Indonesia, amid intense competition from Japanese rivals.

Ford began operating in Japan in 1974 and 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 percent of the imported new car market. However, with the paradigm shift in global automotive markets, the Blue Oval never came to grip with increasing its market share in the land of the Rising Sun, and hence they had to cease its entire operations.

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 percent share of the total new car market in a country struggling from economic slowdown.

The company has also had a tough time selling its Fiestas, Mustangs and Explorers in the Japanese market, which is dominated by Toyota, Honda, Nissan and other domestic brands. The paradigm shift in Japanese market demographics, especially, hurt Ford’s attempt to increase market share as the population ages and¬†demand for cars by young people decreases.

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