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Nissan to end Philippine auto assembly operations

Manila's trade chief says closure justifies protective tariffs on car imports

Nissan's sales in the Philippines fell 49% in 2020 to 21,751 vehicles, compared with the previous year, prompting the Japanese automaker to shut down manufacturing in the country.   © Reuters

MANILA -- Nissan Motor will end its assembly operations in the Philippines in March as part of efforts to restructure its regional operations, the Japanese automaker said on Thursday.

Nissan's move comes as automakers in the country struggle to keep business humming amid the pandemic. Car sales in the Philippines fell 40% last year to 223,973 vehicles.

Nissan will terminate operations of its Almera assembly line in Laguna Province, south of Manila, upon the expiration of its contract with its local partner, the company said.

While Nissan's assembly plant employs only 133 people, the automaker's decision is a blow to the Philippine car manufacturing industry, which the government is trying to expand to generate more jobs.

Last year, Honda Motor ended car manufacturing operations in the country, a move that cost more than 600 jobs, while Isuzu Motors closed up shop the year before. Both companies have opted to import from other Southeast Asian countries, such as Thailand, where they have larger production.

Trade Secretary Ramon Lopez said Nissan's decision only reinforces the need for "safeguard" duties on imports to protect the domestic industry, even though major car companies that rely on imports opposed them.

"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," Lopez said in a statement on Thursday.

"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 added.

Lopez early this month announced the country would impose temporary tariffs of 70,000 pesos ($1,460) on passenger cars and 110,000 pesos on light commercial vehicles.

Nissan was the third bestselling car brand in the Philippines last year, after Toyota and Mitsubishi, Nissan's partner in its three-way alliance with Renault. Nissan's sales, however, fell 49% to 21,751 vehicles, of which 4,500 were Almera models, according to the trade department.

Nissan said it will continue to invest in the Philippines by expanding dealerships.

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