Ford’s announcement early this year that it was pulling out of the Indonesian market this year hasn’t gone down well with its local sales network. Six dealers in the republic have issued a demand for nearly US$74 million in compensation from the automaker, Channel NewsAsia reports.
The six, who collectively oversee 31 dealerships in the country, have issued warning letters to Ford demanding compensation for losses they have incurred as investors. The group said that if the automaker didn’t respond, a third letter about possible legal action will be sent out. If there is also no response to that, the dealers said that they would take the automaker to court.
One dealer claimed that as of December 2015, and despite a slowdown in business, the automaker was still pushing his company to open a new dealership. Another said that the brand’s decision to pull out of Indonesia in such an abrupt manner was arbitrary and against the law. The group said that Ford unilaterally shut operations down without discussing its plans with its dealer partners.
In January, Ford said it would be pulling out of the Indonesian and Japanese markets this year, stating that it saw “no reasonable path to profitability” in both countries. It said that while it was exiting the market, it would honour its commitment to existing customers with regards to vehicle servicing, parts replacements and warranty claims.
Ford entered the Indonesian market in 2002, and sells its vehicles through 44 franchised dealerships. In 2015, the brand shifted just 6,000 vehicles, which was 0.6% of the total new car market in the country. At last count, it had 35 staff in the republic.
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Too short of a notice given by Ford so it’s only fair that they pay compensation to the dealers so they can move into another business.
In foreign overlord lands, 1 month notice is very normal. Sometimes its 24hr in liew of 1 month notice. So we cannot persoal our foriegn overlords policy.
Indon not so bad. You don’t have to wait 3 months for your parts like Malaysia. Ford should pull out of Malaysia or give their dealership to a company like Tan Chong. Give to Sime Darby where culture is sleeping on the job (like MAS)
ETCM not so many dealership. Better gip to ur umw toyo.. oh wai
Interesting to hear that despite their supposedly “sleeping” on the job, those who got retrenched are highly sought after by Emirates, Etihad, Qatar and many local aircraft companies.
Also do you know Muller next destination? Emirates.
Proton should pull out from Malaysia rather than asking for RM1.5B loan
obviously you are feed by G too much that dont accept business all got risks..and the dealer also responsible to the sales of the market locally. So bad performance in the market also their job not done well..
Only in Indon where the dealers can demand compensation when they perform poorly which makes Ford to pull out.
Terrible company looking to make a fast buck & no patience to build brand loyalty. Didn’t they study the market needs before entering?
Foreign overlords r like that. Come in, make some profit, when see loses, straight wanna come out faster than pre-mature ejaculation.
Every business involves risks.
Study agreements properly.
How about selling Malaysian Proton then?
Proton cronies will demand compensation
P1 alredi have their own sales channel. No need these blackmailers
Proton selling is very bad, if they can sold 50 cars/year is a good achievment.
Compensation: as they say “the devil is in the details”
The question that also needs to be asked is ‘Why did they sell so poorly?’. Only 6000 vehicles sold.
The small Fords are like China made cars.
They break apart easily