The Department of Trade and Industry (DTI) on Thursday stressed the importance of putting in place the safeguard measure on vehicle imports shortly after Nissan Philippines Inc. announced its decision to shutter their operations here.
Trade Secretary Ramon M. Lopez said it is “regrettable” that Nissan is choosing to abandon its production of Almera units in the Philippines as part of its parent firm’s moves to rationalize its manufacturing worldwide. Further, Lopez said the closure serves as an example of why the DTI must impose the safeguard on automobile the soonest.
“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.
“Thus, the provisional safeguard measures need to be immediately put in place to protect the domestic industry from further serious injury.”
According to the DTI, Nissan’s shutdown is but expected given the poor sales of the model in the country, as the Almera sells just about 4,500 units yearly to account for roughly 1 percent of total industry sales. Likewise, the DTI said the plant employs some 133 workers and the Almera itself exceeded its life cycle.
From a global standpoint, however, Nissan has been closing factories left and right, from the United States, to Europe, to Asia, and has left some 42,500 workers jobless. It is also cutting its global production capacity by 20 percent to cope with the market impact of the pandemic and lockdowns to stop the spread of Covid-19.
Nissan, for its part, has vowed to give reasonable compensation packages to its 133 workers in the plant who will be unemployed by the closure, according to Lopez.
The trade chief added the DTI and the Department of Labor and Employment will make sure they can move the displaced workers to another site where they can continue with their manufacturing work.
“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 explained.
The DTI this month decided to apply a safeguard duty per unit of P70,000 on passenger cars and P110,000 on light commercial vehicles in response to a trade union’s petition to protect the local industry from a surge in imports.
As of writing, Nissan Philippines has yet to respond to press queries on when the shutdown will take effect and what it plans to do with the plant.
Nissan is leasing the manufacturing facility owned by the Taiwanese company, Yulon Group. Accordingly, the plant itself will be kept, similar to how the Honda’s facility, remained intact. Lopez said he hopes that the factory can be used for the next entrant to local assembly of cars when the business climate improves after the pandemic.