Nissan Philippines Inc. (NPI) will turn to pure vehicle importer following its decision to cease assembly from completely knocked-down (CKD) the last and only model it has been producing from its factory in Santa Rosa, Laguna factory, the Almera, effective March 2021.
In a statement, Trade Secretary Ramon Lopez said NPI president and managing director Atsushi Najima informed him in a Jan. 20, 2021 letter of the company’s decision to cease assembling its Almera model in the country in line with the group’s global plan to optimize production and efficient business operations in Asean.
The decision is no longer a surprise because Nissan had contemplated to close last year due to weaker volume sales and low market share of the Almera.
“They have in effect extended their stay,” said Lopez.
NPI in a statement said the decision was made following the expiration of its assembly contract with its vehicle assembly partner, Univation Motor Philippines Inc. (UMPI).
NPI said the decision is aligned with Nissan’s plan towards optimized production and efficient business operations in Asean as part of the Nissan NEXT transformation plan.
Lopez said NPI reassured the Department of Trade and Industry (DTI) the 133 workers will be provided reasonable compensation packages and that only assembly workers are affected, as operations of their marketing and distribution network will continue – selling units imported mainly from Thailand and Japan.
NPI for its part said it was informed UMPI will remain active in the Philippines and will continue its other business operations in the country.
NPI added it is coordinating with UMPI to ensure a smooth transition.
Nissan is currently leasing the manufacturing facility owned by Taiwanese company, Yulon Group. Lopez said the plant itself will be kept and expressed hope the plant can be used for the next entrant to local assembly of cars when the business climate improves after the pandemic.
In the Philippines, Nissan Almera’s sales of around 4,500 represents just 1 percent of the total vehicle market. Introduced in the country in 2011, the current third generation Almera had likewise over-extended its model life cycle.
“The stoppage of Almera’s assembly operations, following closely that of Honda and Isuzu, only highlights that the local auto assembly industry is critically impacted by the surge in imports and will thus benefit from the time-bound safeguard duty,” Lopez said, referring to the provisional safeguards slapped on cars and light commercial vehicles.
He added: “The announcement of Nissan to close their assembly operations in the country is regrettable, as these developments all the more demonstrate the critical situation of the local motor vehicle industry. Thus, the provisional safeguard measures need to be immediately put in place to protect the domestic industry from further serious injury.”
The share of locally-assembled light commercial vehicle in the Philippines has deteriorated to 7 percent due to the influx of imports, the DTI said.
Lopez cited Thailand which imposes an 80-percent most-favored nation tariff rate on completely built-up units originating outside Asean. Meanwhile, with various non-tariff measures on motor vehicles in place, Indonesia has effectively discouraged imports and, as a result, imports account for only 7 percent of Indonesia’s domestic market.