Nissan closing assembly plant

MANILA, Philippines — Nissan Philippines Inc. (NPI) is halting assembly operations for the Almera sedan in its Laguna plant by March in line with a global plan to optimize operations in Southeast Asia.

In a letter dated Jan.20 to Trade Secretary Ramon Lopez, NPI president and managing director Atsushi Najima said the company “made the decision to cease production operations for the Nissan Almera at the Santa Rosa plant effective March 2021.”

The decision was made following the expiration of the assembly contract between NPI and vehicle assembly partner Univation Motor Philippines Inc.

The move is also aligned with the firm’s plan to optimize production and operations in Southeast Asia.

In a statement yesterday, Trade Secretary Ramon Lopez said the DTI was informed by NPI last Wednesday of the plan to close the plant, which would affect 133 workers.

The DTI said the move did not come as a surprise as the firm hinted it already planned on closing last year given Almera’s weak sales and low market share.

With sales of around 4,500 units, the Almera represents about one percent of the total local vehicle market.

NPI introduced the Almera in the country in 2011.

Now on its third generation, the Almera has overextended its model life cycle.

“They have in effect extended their stay. Their major sales come from imported pick-ups and sports utility vehicles,” the DTI said.

The DTI said the affected workers would be given reasonable compensation packages.

In addition, the DTI will be working with the Department of Labor and Employment in providing manufacturing jobs to the displaced workers.

While assembly operations would be shut down, the firm’s marketing and distribution network would continue with the vehicles to be imported from Thailand and Japan.

“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.

The DTI has imposed a provisional safeguard duty amounting to P70,000 for passenger car imports and P110,000 for light commercial vehicles (LCVs) from overseas as it found higher automobile imports are hurting workers in the local vehicle manufacturing industry following an evaluation of a petition filed by the Philippine Metalworkers’ Alliance.

While the safeguard measure is being imposed, the DTI said the country is one of the most open among the larger Southeast Asian member countries.

For instance, it said Thailand imposes an 80 percent Most Favored Nation tariff rate on completely built-up units originating outside the Association of Southeast Asian Nations.

Non-tariff measures on motor vehicles in Indonesia have discouraged imports and as a result, imported vehicles account for only seven percent of that market.

Meanwhile, in the Philippines, locally assembled LCVs account for only seven percent of the domestic market.

With modernized incentives being made available under the Corporate Recovery and Tax Incentives for Enterprises bill, as well as other reforms being pushed including amendments to the Public Service Act, Lopez said the DTI is hopeful of reviving the automotive industry and creating a more attractive investment climate.

NPI is leasing the manufacturing facility owned by the Taiwanese company Yulon Group.

As the plant would remain intact after NPI closes its assembly operations, Lopez is hopeful it could be used by another firm for local vehicle manufacturing when the business climate improves after the pandemic.