Ford to exit Ja­pan, In­done­sia this year

The Pak Banker - - MARKETS/SPORTS -

Ford Mo­tor Co. said on Mon­day it will close all op­er­a­tions in Ja­pan and In­done­sia this year as it sees "no rea­son­able path to prof­itabil­ity" in the two coun­tries where it has strug­gled to gain mar­ket share. Ford will exit all ar­eas of busi­ness, in­clud­ing shut­ter­ing deal­er­ships and stop­ping sales and im­ports of Ford and Lin­coln ve­hi­cles, ac­cord­ing to an email from Asia Pa­cific Pres­i­dent Dave Schoch to all em­ploy­ees in the re­gion viewed by Reuters. Prod­uct de­vel­op­ment car­ried out in Ja­pan will 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," Schoch wrote in an e-mail re­gard­ing the de­ci­sion that was sent to em­ploy­ees on Mon­day.

Ford, one of Detroit's "big three" au­tomak­ers, fol­lows in the foot­steps of Gen­eral Mo­tors Co., which last year de­cided to stop mak­ing GM-branded cars in In­done­sia - with the loss of 500 jobs - 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.

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.

"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," said a Ford spokes­woman based in Shang­hai, con­firm­ing the con­tent of the email. The com­pany has also had a tough time sell­ing its Fi­es­tas, Mus­tangs and Ex­plor­ers in the Ja­panese mar­ket, which is dom­i­nated by Toy­ota Mo­tor Corp., Honda Mo­tor Co., Nis­san Mo­tor Co. 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.

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