Car manufacturers have struggled as the strength of the Australian dollar has stoked sales of cheaper imported vehicles from southwest Asia and reduced exports.
Australia produced sales of 1.1 million vehicles in 2012, with 65 brands marketing 365 models, making it one of the most crowded and competitive markets in the world, Ford officials said.
Last month GM Holden said it was cutting 500 jobs, or 18 percent of its work force, as the unprecedented strength of the Australian dollar left it unable to compete with foreign rivals.
GM's manufacturing costs in Australia have climbed about 60 percent over the past decade, Mike Devereux, managing director of Holden, told a media conference in Adelaide on April 8.
Ford has previously committed to make cars in Australia only until 2016 and said last July that it would cut about one in seven jobs from a workforce that then numbered 3,014.
"There will certainly be very large implications for businesses on the supply chain," said Richard Reilly, CEO of the Federation of Automotive Products Manufacturers.
Jacques Nasser, chairman of the world's largest miner, BHP Billiton Ltd., and former CEO of Ford, told an event in Melbourne last month that the closure of one automaker could spark a "domino effect" in the industry.
"Let's assume one of the three decide to exit Australia in terms of manufacturing, then you end up potentially with a sub-scale supplier infrastructure," he said.
GM, Toyota commit
GM and Toyota will continue manufacturing cars in Australia, the two companies said in separate statements.
"The industry can survive in Australia," Holden's Devereux said in a statement.
Toyota was considering the impact of Ford's withdrawal on its local suppliers and "intends to maintain its operations in Australia," the company said.
Australia has been a cradle for executive leadership within Ford.
Nasser, 65, started his more than three decade career with the company in Australia before becoming CEO in 1999.
Executive Chairman Bill Ford replaced him in October 2001.
And before Marin Burela became president of Ford's Chinese joint venture with Chongqing-based Changan Automobile Co., he led the company's Australian unit.
Bloomberg, Reuters and David Phillips of Automotive News contributed to this report.