In a major announcement Ford has decided to exit the two major automobile markets in Asia due to low sales - Japan and Indonesia. Ford will be phasing out the operations in Japan and Indonesia before exiting both these markets by 2016 completely. The American auto giant revealed that after a lot of consideration, they found that there's no way to earn profit in the said markets.
Ford also claimed that they have done a lot of feasibility study and analysis only to find that by no means possible, sales can be boosted in these regions and exiting the markets is the only solution. However, Ford has thought a lot of the present customers and the company has decided to provide proper support for service, spare parts and warranties. Which means that the current owners need not worry about their vehicles.
Ford is in the process of restructuring their global business and in the process of doing so, they found that there's no reasonable path but to close the business to achieve growth. The company wasn't getting the proper return on the investment they made in both the Asian countries, which led to such extreme measures. But Ford is not the only American to exit Indonesia, but General Motors followed the same line last year when they shut their operations in the tropical country.
Interestingly enough, as discussed above, Indonesia is one of the largest markets in Asia and in fact the largest car market in South East Asia. While Japan has an array of homegrown manufacturers like Toyota, Honda, Nissan, who cater the local markets, Indonesia largely depends on companies from outside. So much is the dominance of local manufacturers in Japan that only 6% of the cars sold last year out of 50 lakh vehicles sold were from foreign manufacturers.
The sales number of the foreign manufacturers also took a hit in the last two years in Indonesia and only the Japanese manufacturers are doing well in the country. Toyota and Daihatsu hold almost 50% of the market share while Honda and Suzuki also hold a large share in the market. Overall, the above mentioned manufacturers cater to 80% of the market in the South East Asia's largest economy.
Talking about the Indian market, both the American manufacturers are not doing too well here too. Talking specifically about Ford, their sales number is definitely low, but the last couple of launches received a good response from the customers. Both the Aspire sedan and the new Figo hatchback are doing marginally good over the previous products. Ford also launched the new Endeavour and will be launching the Mustang in a couple of days.