TOKYO -- Having to choose between Japan and China, Ford Motor picked the latter in hopes of resolving its excessive dependence on the U.S. market.
The American automaker said it will withdraw from the Japanese market by the end of 2016, concluding a decades-long journey shared in part with local automaker Mazda Motor.
Ford CEO Mark Fields said last year in Detroit that though relations with Mazda had not ended, they were very different from when he was in Hiroshima, adding that no new collaborations were on the table. Fields was once president of the Hiroshima-based carmaker, leading efforts to rebuild it after Japan's economic bubble burst.
Nearly a century-long history
Ford entered the Japanese market in the 1920s, before other automakers. The war disrupted its expansion efforts in Japan, but the company returned to the market when Japan's economic growth became notable in the 1960s.
At that time, Ford trailed rivals such as General Motors and Chrysler. But Chairman Henry Ford II had a secret strategy to partner with Mazda, then a newer automaker. The partnership begun in 1970 reached a milestone when Ford took a 25% stake in Mazda in 1979. Since then, the duo has run a "three-legged race" together.
But the relationship's dynamics changed drastically when Mazda fell into a crisis in the 1990s. Mazda had expanded its domestic sales network to five channels in the late 1980s, when Japan was in the peak of its bubble economy. One channel was Autorama, a dealership chain that sold Ford vehicles. When the economic bubble burst, the expansion came back to bite Mazda.
Mazda's main lender, Sumitomo Bank -- one of the predecessors of Sumitomo Mitsui Banking Corp. -- had askedToyota Motor for help in rebuilding Mazda, but Toyota declined. Mazda had only Ford to lean on. In 1996, Ford raised its stake in Mazda to 33.4% and sent corporate official Henry Wallace to head the Japanese company as president.
Mazda's five-channel sales network came under the scalpel. Mazda no longer was able to sell Ford vehicles, leading to a sharp decline in Ford's Japanese sales. Fields led efforts then to overhaul Mazda's sales operations.
With instability in the financial system chilling Japanese demand, Ford's view of Japan started shifting from a market to a technical center. Focusing on Mazda's strength in compact vehicles, Ford adopted Mazda's engine and platform designs to its vehicles worldwide. This strategy worked, giving their alliance a reputation as a successful international automaker partnership.
Source-asia.Nikkei
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