Ford Motor Company Plans to Withdraw its Business from Japan and Indonesia

Kuala Lumpur: The American car maker has decided to pull out its business from Japan and Indonesia. The news is quite a shocker for the American muscle fans in these countries cruising around in there Ford Everest and Ford Ranger. The Ford Motor company recently announced that it is withdrawing all of its business activities in Japan by the end of 2016. This audacious decision is being taken after the company analysed its sale over the past years and they could not see any profitable path to rule out the losses. The rising competition with the local brands and increasing cost environment for the international brands made Ford pull out its business. Also, the company is not expecting any sufficient return of investment in near future.

Karen Hampton, Ford Asia-Pacific Communications Vice-President, explained the move by saying that, “The company does not see a reasonable path to profitability to ensure future business in Japan and does not expect a sufficient return on investment.”

She further added that “In areas where Ford cannot remain competitive in the market environment and where its business is not expected to show sales growth or profitability, the company is pursuing a policy of actively withdrawing [from the market>. We will continue to concentrate management resources in other markets.”

Surprisingly this news followed the recent achievement of record sales by Ford Motor Company in ASEAN region in 2015. According to the recent news, Ford recorded a combined retail sales of 103,975 units in the ASEAN region, reaching to a higher side of 3.3% than its sales in 2014. The record sales involved four major markets of ASEAN segment including Philippines, Vietnam, Cambodia and Thailand. However, contrary to this the US auto giant managed to sell merely 6,100 cars and trucks in Indonesia, and 5,000 in Japan, that accounted for only 0.1% of the Japanese market and just 0.6% of Indonesian car sales. Therefore, considering this much challenging domestic conditions we can speculate that Ford's decision of pulling out is feasible for the future growth of the organization.

The withdrawal of Ford is making the existing customers formidable of the after-sales support and warranty, to which the American carmaker has assured that Ford has been doing business in the market for decades and has a well build reputation. Thus, the after sales and warranty support will be continued for Ford and Lincoln vehicles to the existing customers in both the countries.

Some rumors are also coming that Ford might pull out its operations in Malaysia as well, but this is not yet confirmed by any official statement and also the brand did very well here in 2015. Ford Malaysia delivered its second best consecutive performance with overall retail sales rising 31 percent to 13,938 units. Ford Ranger already enjoys a celebrity status in country and Ford is also planning to launch its rugged SUV Ford Everest in Malaysia soon, so all this surmises that Ford has no plans of leaving our country anytime soon.

Also Read: Ford Ranger Wildtrak- A Concise Review