When Nissan Philippines Inc (NPI) announced they were going to stop local assembly of the Almera, it dealt another blow to automotive production in the Philippines.

Effective March 2021, Univation Motor Philippines (UMPI), Nissan's vehicle assembly partner in the country, will cease assembly of the Almera at the Santa Rosa Plant in Laguna. But what exactly were the reasons why Nissan decided to stop the local assembly of the Almera in the Philippines?

According to Atsushi Najima, president and managing director of NPI, it all comes down to several factors.

First is customer needs and preferences in the market which has shifted towards SUVs, crossovers, and pick-ups. This further compounds the next reason which is economies of scale. Having a factory continue making a model that is not selling as well is not viable in the long run.

Here are the reasons why Nissan PH decided to stop making the Almera image

There's also the matter of the parts supply chain. While most parts can be provided by a local supplier, other key components have to be imported in order for production to run smoothly. But if another country has more major parts suppliers available, companies will no longer need to move parts from one country to another.

Primarily, Nissan cited costs as a major issue. Energy, sourcing parts, and labor all entail costs to the manufacturer. Locally-made vehicles cost more to produce compared to sourcing from abroad. 

The company is also undergoing a restructuring. As part of the company's NEXT transformation plan, Nissan will reduce its production capacity worldwide by 20%. The company is already in the process of shutting down several factories and assembly lines around the world, including the Philippines.

Here are the reasons why Nissan PH decided to stop Almera production image

“We need to consider all the factors as of now, as well as for the future. Based on those factors, we had to choose the best options to move forward,” said Najima.

With local production of the Almera set to cease this March, the next-generation model will now definitely be sourced from Thailand. Does this mean Nissan will no longer build vehicles in the Philippines? Not quite, as the company is looking to build the Terra and Navara right here in the Philippines in the future.

Should that plan come to fruition, we might just see the Terra and Navara rolling off the Mitsubishi Motors Philippines Corporation (MMPC) plant in Laguna.