AUTO INDUSTRY NEWS

Ford to shut down Japan, Indonesia operations

Ford to shut down Japan, Indonesia operations image

Text: Martin Aguilar / Photos: Ford | posted January 26, 2016 11:24

Ford closing operations in Japan, Indonesia citing lack of profit

Ford Motor Company will close all operations in Japan and Indonesia by the end of 2016 as the automaker sees “no reasonable path to profitability” or simply due to lack of profit.

In a report by Bloomberg, Ford Asia Pacific spokeswoman Karen Hampton said that the company will shut all operations in Japan and Indonesia “after pursuing every possible option” to boost sales. Hampton added that Ford will provide “ongoing support to customers for service, spare parts and warranties.”

“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 Hampton.

Ford decided to close all operations in Indonesia and Japan due to the dominance of the Japanese manufacturers.

In Indonesia, the automotive industry is dominated by Toyota Motor Corporation and its affiliate – Daihatsu Motor Co. Last year, General Motors Co. shut down its plant in Indonesia due to lack of profit.

Ford Indonesia managing director Bagus Susanto said that the brand will cease operations in the second half of 2016.

"We are announcing the difficult business decision to withdraw our operations from Indonesia in the second half of this year. This includes closing Ford dealerships and official imports," said Susanto. 

Other than Ford, Hyundai Motor Co. and Kia Motors Corporation are also struggling in Indonesia and Japan.

As previously reported, Ford Australia announced that they will be ceasing all production operations at their engine plant in Geelong and at the vehicle assembly plant in Broadmeadows in October 2016. The closure of the plants will mean the loss of approximately 1,200 jobs and will end the production of two Australian-developed Ford vehicles: the Falcon and the Territory SUV.

In the Philippines, Ford's plant in Santa Rosa, Laguna ceased production last 2012 citing lack of supply base and economies of scale. Ford Philippines' plant in Santa Rosa opened in 1999. It has produced the 1999-2003 Ford Lynx, the 2000-2006 Ford Ranger, the 2002-2012 Ford Escape, the 2003-2012 Ford Focus, the 2004-2009 Mazda Tribute and the 2004-2011 Mazda3. Last March 2014, Mitsubishi formally announced their acquisition of Ford's plant in Santa Rosa. Mitsubishi inaugurated the ex-Ford plant last January 2015.