By Roy Stephen C. Canivel
Japanese carmaker Nissan will close its sole car assembly plant in Laguna in March, marking the latest shutdown in an industry that has been finding fewer reasons to make cars in the Philippines when it is cheaper to make them elsewhere.
Nissan Philippines Inc. (NPI) wrote to the Department of Trade and Industry (DTI) on Wednesday, informing Trade Secretary Ramon Lopez about its decision to shutter its assembly plant in the City of Santa Rosa.
A copy of the letter from NPI president Atsushi Najima was seen by the Inquirer.
The company made the decision after the expiration of its contract with its Filipino vehicle assembly partner Univation Motor Philippines Inc. (UMPI).
The DTI on Thursday said 133 workers would be laid off, but the labor department would help them find jobs in the manufacturing sector. They would also receive “reasonable compensation packages,” it said.
Nissan’s marketing and distribution network will continue selling its vehicles produced in Thailand and Japan.
Last year, NPI was considering shutting down its plant due to weak sales and the low market share of its fourdoor Almera sedan, which it has been assembling in Santa Rosa since 2013, according to the DTI.
Nissan would be the third vehicle maker in Santa Rosa to cease operations, after Ford Motor Co. in June 2012 and Honda Cars Philippines Inc. in March 2020, according to Mayor Arlene Arcillas.
Isuzu’s pickup truck assembly plant in nearby Biñan town closed down earlier in 2019.
Arcillas said NPI informed her of its decision two weeks earlier. Pioneer car firms “We are saddened … since (Nissan) was one of the pioneer car companies that made Santa Rosa their home,” she told the Inquirer in a phone interview. She said Nissan was one of the city’s top taxpayers.
UMPI will keep operating in the city for its other vehicle brands, Arcillas said.
Nissan’s operation in Santa Rosa started in October 1997. Aside from Toyota and Mitsubishi, the city hosts Columbia Motors, which manufactures trucks and buses. More than 380 workers lost their jobs when Honda shut down its plant last year.
Nissan is one of the best-selling brands in the Philippines, behind market leaders and fellow Japanese carmakers Toyota and Mitsubishi. Data, however, suggests that this kind of success is possible even without making cars locally.
According to official industry data, Nissan sold a total of 42,694 vehicles in 2019, a 22.2-percent increase from 2018. During that time, only 4,500 of them were the locally assembled Almera, or 4 percent of the entire passenger car market, the DTI said.
It was also one of the best-selling brands in 2020, despite the challenges brought about by the pandemic and the Taal Volcano eruption. Its volume sales dropped 49 percent last year to 21,751 vehicles. It is not clear how many of these were Almera.
In his letter to Lopez, Najima said the shutdown was a move “toward optimized production and efficient business operations in the Asean (Association of Southeast Asian Nations)” and part of the “Nissan NEXT transformation plan.” He was referring to a fouryear plan announced by Nissan headquarters last year to achieve profitability by fiscal year 2023 partly by cutting production capacity by 20 percent. In a press statement in May 2020, Nissan Motor said part of this rationalization plan was to close its manufacturing plant in Indonesia and focus on Thailand “as single production base in Asean.”