Ford is ceasing its operations in Japan and Indonesia by the end of this year due to low sustainability caused by low profits.
Ford will be shutting down its operations in Japan and Indonesia by the end of 2016 because the company feels that there are no chances of profits in those markets. The American automaker also states that there is just no path over there to boost sales. Ford conducted a lot of studies and came to this conclusion after trying out every possible option that they had. However, present customers of Ford need not worry because the company will continue to provide proper support for service, spare parts and warranties.
Ford claims that they want to restructure parts of their business which have no reasonable path to achieve growth and it was clear that the company wasn’t getting proper returns based on the investments they made in Japan and Indonesia. In a similar case, General Motors also shut down its operations in Indonesia last year. It seems that American car manufacturers can’t seem to find much growth in emerging markets.
Indonesia is actually the largest car market in South East Asia but sales have really taken a hit in the last two years. Almost half of the vehicles sold in the Indonesian market come from the houses of Toyota and Daihatsu while Honda and Suzuki also have a major chunk of share in the market. Indonesia is also the largest economy of South East Asia. All in all, Toyota, Daihatsu, Honda and Suzuki have a total market share of 80% in Indonesia.
The Japanese market witnessed sales of 50 lakh vehicles in the last year and out of these, only 6% of the sales came from foreign companies which is extremely low. Sales have been declining since the past few years and apart from Ford and General Motors, Hyundai and Kia too are selling in very low numbers in these markets.