Ford drops out of Japanese market due to dismal sales

Ford Blames market

February 22, 2016

Ford drops out of Japanese market

Ford announced that the company is pulling out of the Japanese and Indonesian markets due to customer disinterest in the brand. Employees in both countries were notified of the decision via an email from Dave Schoch, president of Ford’s Asia-Pacific region, according to Reuters. The email says there is “no reasonable path to profitability,” for the automaker.

“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 said in the email. Ford is the latest automaker to step away from the Japanese marketplace. The combination of consumers favoring the home brands and an economy in stagnation played a huge role in the automaker’s decision to leave. Last year, the Blue Oval only sold around 5,000 vehicles through their 52 dealership network in the country, giving them 1.5 percent of the tiny imported vehicle market. Ford currently employs 292 people in Japan.

Ford was one of the first foreign automakers to set up shop in Japan. In 1925, the company established a manufacturing facility in the country, building Model T and A vehicles. In 1940, production ended due to political tensions between Japan and the U.S. Ford wouldn’t return to Japan until 1974 and in time would form a partnership with Mazda.

As for Indonesia, Ford only entered this market back in 2002. The company currently operates 44 dealerships with a staff of 35 people. Last year, the automaker only sold around 6,000 vehicles, taking only 0.6 percent of the total market share in Indonesia. The marketplace is largely dominated by Japanese and local brands.

“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,” a Ford spokeswoman told Reuters. It is unknown when Ford will begin the winding down operations in the two countries.