The Jakarta Post
US car manufacturer Ford has announced that it will cease operations in Indonesia from the second half of this year, a decision that came as a shock as it had only began selling the New Ford Everest since the first half of 2015.
"Today 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," Ford Indonesia managing director Bagus Susanto said in a press release on Monday.
Ford Indonesia will maintain service and uphold guarantees for all existing vehicles in the nation. An announcement regarding changes in the terms of service will be announced later.
Ford will also close its operations in Japan. The closure of operations in both Indonesia and Japan operation were reportedly due to the company's small market share. In Japan the market share of the blue oval is just 1.5 percent of the imported cars segment, according to a report by kompas.com.
"In Indonesia, it was difficult for Ford to compete without local manufacturing and vehicles to sell in key market segments. Ford has restructured its business there but still has less than 1 percent of the market with "no reasonable path to sustained profitability," Ford spokesman Neal McCarthy said to Associated Press.
In Indonesia one of the main backbones of Ford's sales is the pickup/double cabin Ranger. The pickup is sold mostly as operational equipment for commercial fleets with an 80:20 ratio between commercial and private.
But along with the commodity price slump, the mining companies that are the main market for the pickup and double cabin units are struggling with their operations. Based on Gaikindo data, there were only 12,034 Double Cabin sales in 2015 with an average of 1,002 cars per month. Peak sales of the unit were in 2012, after the commodity boom of the 2000s, with 19,364 units sold and an average of 1,613 per month.
"The mining industry is facing a weak market, production decreased by 18 percent during 2015 and the effect will continue this year. This is also affecting the purchasing of the operational equipment that has so far decreased 50 percent from spending during 2015," Panin Sekuritas mining analyst Fajar Indra said to thejakartapost.com ( bbn )( + )