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

Steph Willems
by Steph Willems
after ford calls it quits in indonesia dealers tell company to pay up

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.

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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.

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