Ford Motor Company [NYSE:F] announced today it will cease selling its Ford and Lincoln brands in the Japanese and Indonesian markets. The cited reason was a lack of a “reasonable path to profitability.”
The move is expected to take place in the second half of the year and will lead to a few hundred job cuts. A spokesperson for Ford confirmed to The Wall Street Journal that the automaker has 52 dealerships and 292 employees in Japan and 44 dealerships and 35 employees in Indonesia.
As drastic as pulling out of the market sounds, the move makes a lot of sense considering the sales numbers involved. In all of 2015, Ford and Lincoln managed just 5,000 sales in Japan. In Indonesia, where only the Ford brand is offered, the automaker managed a little over 6,000 sales for the year. That gave Ford market shares of 0.1 and 0.6 percent in the respective markets.
American makes have never sold in huge numbers in Japan and as Ford sees it conditions will only worsen. Demand for cars is expected to continue to fall as the population ages and more and more young people avoid buying a car.
In Indonesia the reasons are different. There, Ford faces a tough challenge against brands with local production due to punitive taxes for imported vehicles.
This year, Ford will also cease car and engine production in Australia. However, the automaker isn’t exiting the Aussie market completely. The models currently produced there are the Falcon and Territory.