After Ford Calls It Quits In Indonesia, Dealers Tell Company to Pay Up

Steph Willems
by Steph Willems

Indonesia is the biggest vehicle market in Southeast Asia, and Ford Motor Company is running away from it.

The automaker’s announcement earlier this year that it plans to stop selling vehicles in the country came as a shock to dealers, who now want Ford to compensate them in a big way, Reuters reports.

Six businesses that oversee 31 dealers (representing 85 percent of the country’s Ford sales) now want $75 million from the automaker, and they’re willing to sue if they don’t get their settlement. According to the dealers’ lawyer, Harry Ponto, the dealers made large investments in new showrooms in order to support Ford’s expansion plan.

Ponto told Reuters, “This is something that was done unilaterally and was unfair for the Indonesian partners. It’s an action that is beneath an international brand like Ford.”

In 2011, Ford announced a strategy to grow its market share in the region. Five years later, its products amount to less than one percent of Indonesia’s new vehicle sales, and the automaker wants to pull up stakes — including imports and sales — by the end of the year. Under the new plan, existing Ford owners will still be able to have their vehicles serviced.

The reason for the cut-and-run, according to Ford, is simple economics. A spokesperson told Reuters that the company couldn’t find a way to stay profitable “after pursuing every possible option.”

One dealer, PT Kreasi Auto Kencana, invested $380 million in materials and personnel to support the expansion. After the company announced the pullout, the dealer realized there was no clause in its contract for what would happen if the automaker left the market.

Indonesia isn’t the only market Ford said “nah, never mind” to. It also plans to pull out of Japan by the end of the year.

Steph Willems
Steph Willems

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  • 05lgt 05lgt on Jun 27, 2016

    I'm a lot ignorant of contract law, even in my own country, but... Do these dealers have any more standing to sue Ford if there was no protection from Ford calling it quits in the agreement than if Ford were to sue the dealers for failure to move the cars? I'm pretty sure Ford invested a sizeable amount into Indonesian sales too; what (other than local courts) makes the dealers immune to risk in the arrangement?

  • Old Man Pants Old Man Pants on Jun 27, 2016

    Maybe an American brand is haram there. Did McDonald's or Levis catch on? Apple must have.

    • TMA1 TMA1 on Jun 28, 2016

      I don't recall seeing many McD's, but Baskin Robbins and 7-11 were easy to find.

  • Marcr My wife and I mostly work from home (or use public transit), the kid is grown, and we no longer do road trips of more than 150 miles or so. Our one car mostly gets used for local errands and the occasional airport pickup. The first non-Tesla, non-Mini, non-Fiat, non-Kia/Hyundai, non-GM (I do have my biases) small fun-to-drive hatchback EV with 200+ mile range, instrument display behind the wheel where it belongs and actual knobs for oft-used functions for under $35K will get our money. What we really want is a proper 21st century equivalent of the original Honda Civic. The Volvo EX30 is close and may end up being the compromise choice.
  • Mebgardner I test drove a 2023 2.5 Rav4 last year. I passed on it because it was a very noisy interior, and handled poorly on uneven pavement (filled potholes), which Tucson has many. Very little acoustic padding mean you talk loudly above 55 mph. The forums were also talking about how the roof leaks from not properly sealed roof rack holes, and door windows leaking into the lower door interior. I did not stick around to find out if all that was true. No talk about engine troubles though, this is new info to me.
  • Dave Holzman '08 Civic (stick) that I bought used 1/31/12 with 35k on the clock. Now at 159k.It runs as nicely as it did when I bought it. I love the feel of the car. The most expensive replacement was the AC compressor, I think, but something to do with the AC that went at 80k and cost $1300 to replace. It's had more stuff replaced than I expected, but not enough to make me want to ditch a car that I truly enjoy driving.
  • ToolGuy Let's review: I am a poor unsuccessful loser. Any car company which introduced an EV which I could afford would earn my contempt. Of course I would buy it, but I wouldn't respect them. 😉
  • ToolGuy Correct answer is the one that isn't a Honda.
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