Nissan Shuts Down Laguna Plant, Ends Assembly Operations in the Philippines
Nissan is closing its production facility in Laguna, which effectively ends its assembly operations in the Philippines, the Department of Trade and Industry announced on Thursday, January 21.
Nissan ends assembly operations in the Philippines
The DTI said Nissan informed the agency that it will cease aseemblig its Almera model in the country, “in line with the group’s global plan to optimize production and efficient business operations in the Association of Southeast Asian Nations (ASEAN) region.”
“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,” DTI Secretary Ramon Lopez said in a news release. “Thus, the provisional safeguard measures need to be immediately put in place to protect the domestic industry from further serious injury.”
Esquire Philippines has reached out to Nissan Philippines but the company has yet to make a formal statement about the closure.
According to the DTI, Nissan Almera’s sales of around 4,500 represents just one percent of the total vehicle market in the country and its assembly activity employs 133 workers. Those workers will now be displaced following the announcement of the closure. Introduced in the country in 2011, the current third generation Almera had over-extended its model life cycle, the DTI added.
Nissan said reassured the DTI that all 133 workers will be provided “reasonable compensation packages” and that only assembly workers are affected. Operations of their marketing and distribution network will continue, which will continue selling units imported mainly from Thailand and Japan.
The Japanese vehicle manufacturer had first expressed its intention to close the Laguna plant last year due to weaker volume sales and low market share of the Almera. A bulk of the Japanese brand’s major sales come from imported pick-ups and SUVs.
“They have in effect extended their stay,” the DTI said.
Provisional safeguard measures
Following the closure, Lopez said there was a need for provisional safeguard measures on automotive sales in the country.
“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 secretary was referring to the DTI’s decision to impose provisional safeguard duties in the form of a cash bond of P70,000 per unit for imported passenger cars and P110,000 per unit imported for light commercial vehicles in order to protect the domestic motor vehicle manufacturing industry from increased importation of passenger cars and light commercial vehicles.
This provisional safeguard measures take effect for 200 days from the issuance of an order by the Commissioner of Customs and while the case is under formal investigation by the Tariff Commission.
DTI added that since 2019, Nissan had already closed plants across Europe, US and other developing countries and have laid-off approximately 42,500 workers globally. The company has said that it plans to further cut its global production capacity by 20 percent as well as its number of models offered to the market.
According to the DTI, the Nissan is currently leasing the facility in Sta. Rosa, Laguna from the Yulon Group of Taiwan. The plant itself will be kept intact, similar to Honda’s facility.