Ford Motor Co. will close down all operations by the end of this year in Japan and Indonesia, where the U.S. automaker says it has no path to boost sales or earn profits.
The step is being taken “after pursuing every possible option,” Karen Hampton, Ford’s Asia Pacific spokeswoman, said in an e-mailed statement. The company will provide ongoing support to customers for service, spare parts and warranties, she said.
“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,” Hampton said. Ford is committed to restructuring parts of its business that “have no reasonable path to achieve sales growth,” she said.
The exits by Ford are the latest examples of an automaker losing patience in struggling auto markets in parts of Asia that are dominated by Japanese manufacturers. General Motors Co. last year closed down its factory in Indonesia, the largest car market in Southeast Asia. Industrywide sales in both Indonesia and Japan slumped in each of the last two years.
While Indonesia is the largest economy in Southeast Asia, Toyota Motor Corp. and its affiliate Daihatsu Motor Co. dominate by accounting for about half of all vehicles sold, according to LMC Automotive. Including Honda Motor Co. and Suzuki Motor Corp., the companies have market share of about 80 percent.
Japan’s more developed auto market peaked in 1996 with almost 7.3 million vehicles sold and has declined during much of the last two decades. Automakers sold about 5 million vehicles in Japan last year, and foreign brands had less than 6 percent market share.
Ford isn’t alone in struggling in Indonesia or Japan’s car markets. Hyundai Motor Co. and Kia Motors Corp. combined to sell fewer vehicles than Ford in Indonesia last year. Each of GM’s brands also trailed Ford by registrations in Japan last year.