The Strategist

Ford To Close Operations in Japan and Indonesia

01/25/2016 - 15:48

The American group has decided to cease its activities in the territory of Japan and Indonesia. Ford’s management has found these markets unprofitable and unpromising.
Reuters referring to head of the Asia-Pacific division of Ford said that the American manufacturer has decided to leave the markets of Japan and Indonesia. The company concluded that to continue to work there makes no sense: sales of cars are stopped, the dealer network is disbanded. However, the warranty and after-sales commitments will still be carried out, as it is required by law.

The American concern has been present on the Japanese market since 1974. The dealer network consists of 52 units, where 5,000 vehicles have been sold by order in the last year. The Japanese fondly stick to American sports cars, and the company could theoretically stay in the market as a niche producer, promoting Mustangs and a mid-GT. Yet, the management decided to "burn bridges" completely. Competition in the mass sector with the Japanese on their home market is really pointless – local motorists have too specific needs, and also are characterized by enviable patriotism.

In Indonesia, where Ford operates since 2002, selling imported cars is an uphill battle as the country’s economy is currently going through hard times. New cars are simply too expensive for the country’s population, and localization of production, according to Ford’s managers, is impractical. Last year, the company sold about 6000 machines in this country.

In the global context, Ford sees its future as an electric cars manufacturer. The company recently announced plans to invest up to $ 4.5 billion by 2020 to develop this segment of cars. It is planned to create 13 new models, increasing the share of electric cars and hybrids in the company's portfolio to 40% from the current 13%. Already in 2016, the concern intends to offer a new Ford Focus Electric.

The car will be equipped with the new charging system that allows the batteries to replenish 80% in just 30 minutes. That should be enough for 150 km. run. A driving assistant Brake Coach will work with the system recovery. It monitors the use of brakes and informs the motorist about the most optimal manner of driving.

The company’s engineers developed a fully digital instrument panel with a large number of different settings especially for the new Focus Electric. It allows monitoring the on-board equipment and the battery status. The transmission acquired several operating modes for maximum energy savings and dynamic acceleration. This option can be useful in emergency situations and during long-town trips.

Production of the updated Focus Electric will begin in a few months. The electric car will be available at dealers in Europe and North America. After the release of new products, the company will continue its work on the cars electrification. In the next few years, share of electric cars and hybrids made by Ford is expected to increase from 18 to 40%.