The Ford Motor Company Philippines was once a major player in the country’s automotive industry, playing a significant role in shaping the industrial economy of the Philippines. Ford’s journey in the Philippines began as far back as 1913, during the American colonial period. Recognizing the opportunities, Ford, along with other American companies, established the Philippines as a base for manufacturing and overseas operations. Over the years, Ford became a dominant force in the Philippine automotive market, but today, its manufacturing presence in the country is a thing of the past. While Ford continues to sell its vehicles and offer services in the Philippines, its manufacturing activities have long ceased.
From 1968 to 2012, Ford manufactured vehicles in the Philippines, with its last plant located in Santa Rosa, Laguna. This facility, which cost around 4 billion pesos ($270 million), was considered state-of-the-art when it opened in 1997. However, by 2012, Ford announced the consolidation of its manufacturing operations in Southeast Asia, leading to the closure of its Santa Rosa plant. This decision resulted in the layoff of hundreds of workers and marked the departure of another American manufacturing giant from the Philippines, following the exit of Intel a few years earlier. This prompted many to wonder why Ford decided to leave. Was it due to the political instability in the Philippines, the high cost of electricity, or the country’s corporate tax system?
Ford’s history in the Philippines officially began in 1929 with the establishment of Pilipinas Ford Car Works Incorporated. From the 1920s to the 1970s, the Philippine automotive market was dominated by American brands like Dodge, Chevrolet, and Mercury, alongside Ford. This dominance was partly due to the country’s historical ties with the United States. As one of the few competitors in the market, Ford found a ripe opportunity for expansion. In 1967, Ford Philippines was established as a direct subsidiary of the Ford Motor Company. A year later, the company began operations at its assembly plant in the Metro Manila region, located on an 11-hectare site in the Muntinlupa Industrial area. This plant, covering 182,000 square meters, was a significant economic milestone for the country. The plant’s 450 employees enjoyed numerous benefits, and Ford’s investment in the Philippines was seen as a vote of confidence in the country’s economic prospects.
In 1976, Ford Philippines inaugurated a body stamping plant in Bataan, signaling further confidence in the growing Philippine economy. However, due to various challenges, the company ceased operations in 1984. It wasn’t until 1997 that Ford returned to the country, rebranding itself as Ford Motor Company Philippines. The state-of-the-art plant in Laguna played a key role in Ford’s comeback. Over the following years, the company expanded its market share, selling popular models like the Ford Lynx, Ford Ranger, and Ford Escape. At its peak, the Laguna plant, which spanned 21.4 hectares, had an annual production capacity of over 36,000 units. Notably, this plant was the only one in the Philippine automotive industry used for export, making the country an attractive destination for investment. However, as mentioned earlier, Ford ceased operations at the Laguna plant in 2012, citing supply and operational challenges, including a lack of a supply base and economies of scale. Despite efforts to find a solution, including introducing new products to the Philippine market, it wasn’t enough to sustain the plant’s operations. As a result, 250 employees lost their jobs, and the downstream economic benefits were also impacted.
From 2002 to 2012, Ford Philippines exported over 80,000 units worth more than $1 billion to countries like Thailand, Indonesia, and Malaysia. However, with Ford’s exit, the Philippines had to rely on imports from Thailand and the United States for Ford-branded vehicles. While Ford continued to operate its sales and marketing in the Philippines, expanding its dealerships, its manufacturing legacy was taken over by Mitsubishi Motors Philippines Corporation, which acquired the Laguna plant in 2015.
The closure of Ford’s manufacturing operations in the Philippines was primarily due to supply chain issues and operational inefficiencies. However, some argue that these reasons were only part of the story. A report from Rappler suggested that Ford and the automotive industry had been pushing for an extension of tax incentives to keep production in the Philippines, indicating that they were struggling to maintain operations. The lack of government support and a stagnant local market further compounded these challenges. Additionally, neighboring Thailand, known as the regional hub for automotive manufacturing, offered a more sustainable and long-term option for Ford. Moreover, the Philippine market was increasingly dominated by Japanese automakers, along with rising competition from South Korean brands like Hyundai and Kia, and new entrants from China.
Despite these challenges, Ford managed to retain a significant market share in the Philippines. In 2021, the brand sold approximately 20,000 units, and its small SUV lineup held a 55 percent market share—a surprising achievement considering Ford’s struggles in other Asian markets.