Ford officials have confirmed plans to exit the Japanese and Indonesian automotive markets because they are not profitable. That means closing dealerships and no longer selling or importing Ford and Lincoln vehicles in the two countries.
“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,” said spokeswoman Karen Hampton in a statement. “Therefore, we will cease all operations in these markets before the end of 2016 and concentrate our resources elsewhere.”
Hampton said the decision “has just been made and has been communicated to our employees and dealers. As we work through the closures, our priorities are to ensure we treat our employees and our dealer partners with respect and support them in this transition.”
Many automakers have struggled to gain market share in Japan, which historically has made it hard for non-Japanese brands to be imported and sold. Ford sold about 5,000 vehicles there last year and has less than 2 percent market share.
Ford has had a presence in Japan since 1974, Reuters reported earlier from Tokyo after obtaining an email from Asia Pacific President Dave Schoch to employees in the region. The closures affect about 52 dealerships and almost 300 employees in Japan. Product development will also cease in that country.
Ford has been in Indonesia since 2002 and has 35 employees and 44 franchised dealerships. Sales were about 6,000 vehicles last year, which is less than 1 percent market share.
General Motors announced last year it was going to stop making vehicles in Indonesia, which led to 500 job losses.
Ford will let customers in both countries know that they will be able to continue to get parts to service their vehicles and honor warranties even after the Ford dealerships are closed, Hampton said.
“Ford remains committed to serving global markets while aggressively restructuring parts of our business which have no reasonable path to achieve sales growth or sustained profitability, particularly in areas where market dynamics prevent us from competing effectively,” she said.