After pursuing “every possible option,” global auto giant Ford Motor Co. has said decided to close down all operations in Japan and Indonesia by the end of this year.
“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 Karen Hampton, Ford’s Asia Pacific spokeswoman, in a statement.
The company, she said, is committed to restructuring parts of its business that “have no reasonable path to achieve sales growth,” adding that Ford will provide ongoing support in both countries to customers for service, spare parts, and warranties.
Industry-wide sales, even among domestic auto makers, in both Indonesia and Japan slumped in each of the last two years. Domestic automakers sold about five million vehicles in Japan last year with foreign brands holding less than six percent market share there.
“In Indonesia, it was difficult for Ford to compete without local manufacturing and vehicles to sell in key market segments,” Ford spokesman Neal McCarthy told the Associated Press.
The company, he said, has restructured its business there, but still has less than one percent of the market with “no reasonable path to sustained profitability,”
The Ford retreat follows in the wake of rival GM’s closure last year of its manufacturing plant in Indonesia, the largest auto market in Southeast Asia.
The GM plant was originally opened in 1995, but closed between 2005 and 2013, when it reopened with a $150 million investment.