FILE - In this Thursday, Jan. 9, 2014, file photo, a man looks at a Ford Fiesta compact car in Tokyo. Ford Motor Co. said Monday, Jan. 25, 2016, that it's pulling out of Japan and Indonesia before the end of the year because there is no path to grow sales or make sustained profits. The automaker says "market dynamics" prevent it from competing effectively in both of the countries, so it will cease operations and concentrate resources elsewhere. (AP Photo/Koji Sasahara, File)
Republished January 25, 2016 - 9:17 AM
Original Publication Date January 25, 2016 - 5:45 AM
DETROIT - Ford Motor Co. is pulling out of Japan and Indonesia, saying that market conditions in each country have made it difficult to grow sales or make sustained profits.
"Japan is the most closed, developed auto economy in the world, with all imported brands accounting for less than 6% of Japan's annual new car market," spokesman Neal McCarthy wrote in an email message. The 12-nation Trans Pacific Partnership trade agreement in its current form will not improve Ford's ability to complete there, he said. Congress could vote on the pact this year.
Neither market is large for the Dearborn, Michigan, automaker. Last year Ford sold only 6,100 cars and trucks in Indonesia and only 5,000 in Japan, where it has accused the government of protecting domestic brands.
The company in an emailed statement said that the decision was communicated to employees and dealers on Monday. Ford will exit the countries before the end of the year and plans to explain to customers its commitment to servicing cars, providing parts and making warranty repairs.
McCarthy said auto sales are expected to decline in Japan in the coming years. Analysts have said that's due to an aging population and declining interest in cars among younger people in urban areas.
In Indonesia, it was difficult for Ford to compete without local manufacturing and vehicles to sell in key market segments, McCarthy said. Ford has restructured its business there but still has less than 1 per cent of the market with "no reasonable path to sustained profitability," he said.
When the trade agreement was being negotiated in 2013, Joe Hinrichs, Ford's president of the Americas and a former head of its Asia-Pacific operations, said that Japanese Prime Minister Shinzo Abe should be told to open the country's automobile market.
"We hope the U.S. government will send a clear message that any future trade policy with Japan must ensure a level playing field and not come at the expense of American workers," Hinrichs said.
News from © The Associated Press, 2016