By Jenina P. Ibañez, Reporter
NISSAN Philippines, Inc. (NPI) will halt its assembly operations in the Philippines in March after the sales decline of its locally produced Almera vehicles, the Trade department said.
Trade Secretary Ramon M. Lopez said Nissan’s closure of its local assembly operations is proof of the need for safeguard measures on imported cars.
“Nissan in the Philippines, together with its vehicle assembly partner, Univation Motor Philippines, Inc. (UMPI), have made the decision to cease production operations for the Nissan Almera in the Santa Rosa plant in the Philippines, effective March 2021. The decision has been made following the expiration of the assembly contract between NPI and UMPI,” the company said in a statement.
Nissan’s marketing and distribution in the country will continue through imports from its Thailand and Japan manufacturing sites.
“Nissan remains committed to its investments in the Philippines. The company will continue to contribute to the growth of the Philippine automotive industry through its innovative products and excellent services, as well as its dealer expansion nationwide.”
The 133 employees working on local assembly will be laid off, Nissan confirmed in an e-mail.
Nissan said that it is working to optimize production and business operations in Southeast Asia.
The closure is part of a recent trend, after Nissan shut its plant in Indonesia last year. It also plans to close plants in Spain.
The Japanese automaker announced last year that it would cut 20% of its product lineup and annual production capacity.
Nissan registered the third-highest market share among members of the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) last year, selling 21,751 units which represented a 9.72% share of the market.
But the Department of Trade and Industry (DTI) in its statement on Thursday said that Nissan Almera sales usually account for 1% of the total vehicle market. Most Nissan sales, DTI said, come from imported pickups and sport utility vehicles.
“Nissan has intimated that they already contemplated closing last year given weaker volume sales and low market share of the Almera. They have in effect extended their stay,” DTI said.
The Nissan closure follows Honda Cars Philippines, Inc. shutting its local assembly in March last year, which was attributed to rationalization done in response to a global slowdown in the automotive industry.
“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,” Mr. Lopez said.
“Thus, the provisional safeguard measures need to be immediately put in place to protect the domestic industry from further serious injury.”
The DTI slapped safeguard duties on imported cars after its investigation confirmed a link between a surge in imports and a decline in local automotive jobs.
Automotive business groups have criticized the safeguard measures, saying that it would impede the recovery of a sector hit hard by the pandemic.
Car sales in the Philippines declined by 39.5% to 223,793 units in 2020 compared with the previous year after restrictions declared to contain the coronavirus disease 2019 (COVID-19) pandemic lowered demand, data from CAMPI and the Truck Manufacturers Association showed.
The laid off workers will be given compensation from Nissan, DTI said, adding that the Labor department will help them find manufacturing jobs.