Over the weekend, Nissan announced that they would be halting production of their last locally-assembled vehicle in the Philippines; the Almera. A quick look at the local Nissan website indicates that this is the last generation model still. This is the latest in the string of closures of factories in the country.
A bit of background info
Last week, it was reported that the Philippine government would be introducing tariffs that would effectively increase the price of imported vehicles in the country. This was to counter the rise of imported vehicles that had flooded the market from other ASEAN markets. Following the ASEAN Free Trade Agreement, the Philippines did not put up sufficient protectionist measures, nor did it improve its ability to compete in the regional automotive scene. As a result, about 70% of cars sold annually there are imported. Being one of the few LHD markets in the region, this was probably a little harder for them.
However, even with the announcement of the new tariff (roughly RM6,000 per vehicle), it seems some companies are just not convinced they can continue.
According to the PhilStar, Nissan leaving their local assembly operations there would mean 133 jobs lost in the Laguna area. In 2019, Isuzu too closed their local production of the D-Max, with Honda leaving in 2020. Right now only a handful of brands continue to carry on CKD production in the Phillipines. They are Toyota, Mitsubishi, Hyundai and Foton.
The automotive industry we have in Malaysia should not be taken for granted. Here we’ve been able to retain quite a number of local-assembly operations. Brands like Mercedes-Benz, BMW, Volvo, Toyota, Honda, Mazda, Nissan, Isuzu, Peugeot, Kia and more conduct local assembly here. However, the writing’s already on the wall for our industry as well.
Last year a number of huge automotive-related investments went to neighbouring Thailand, Indonesia and Singapore. Not just that, Hyundai, who once housed their regional training centre in Malaysia decided to move to Indonesia instead.
The powers that be need to start asking themselves how much longer they’re able to keep the industry going if no clear plan exists to make brands feel like they’re competing on a level playing feel, or at the very least given clear structures to base their investments upon.
