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 compete
there, he said. Congress could vote on the pact this year.
Neither
market is large for the Dearborn 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 percent 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. Tom Krisher, Associated Press
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