Nissan Motor Philippines Inc. (NMPI), which assembles most of its motor vehicles in the country, has urged government to provide special support to manufacturing companies that maintain their domestic operations despite high cost of manufacturing and in spite of being at the mercy of cheap imports.
Company president and CEO Allen Chen told reporters as the Taiwanese-owned company has added new model -- Almera – to its product line up that would substantially beef up its local CKD (completely knocked down) assembly operation to much as 90 percent as against imported CBU (completely built-up) units share of only 10 percent.
Cheng said NMPI invested additional P10 million for some retooling of its plant for the assembly of Almera.
“The main concern is for the Board of Investments to grant special support for CKD operations and other manufacturing industries. The high electric power cost and the very cheap CBU imports because of the zero tariff of imports coming from ASEAN, these are not good for local manufacturing so the government should consider granting special support for manufacturing,” Chen said.
Chen, however, refused to specifically say what special support the government should provide to the manufacturing sector in order to help offset the high cost of manufacturing in the country. Despite the high cost of manufacturing in the country, Chen said NMPI, which is 85 percent owned by the Taiwanese-Yulon Motors, would still like to maintain more CKD assembly in the country than CBU. It has 90:10 ratio in favor of CKD operation.
The assembly of Almera would also bring the number of CKD models to four (Almera, X-Trail, Grand Livina and Sentra 1.3) of NMPI to four.
It has only two imported CBU models (Teana and Sentra 200).
The Almera would also beef up NMPI’s plant capacity utilization to about 50 percent from the current 30 percent. It is positioned to compete in the high volume B-segment, the fastest growing compact sedan car category in the country.
“Let me be honest – sustaining such vehicle operations in the Philippines is definitely a challenge, as we, similar to other local players, need to hurdle high manufacturing cost. We are among the few car manufacturers who continue to weather the challenging local automotive industry. In addition to high overhead costs, we need to contend with imported CBU vehicles, which have become more attractive over the years due to free trade agreements with other regions,” Chen said in a speech during the launch of Almera Wednesday night.
“Despite the continuous difficulties we encounter, we choose to be resilient, as we are optimistic that our industry will soon become more competitive with other ASEAN markets, especially with the government’s support,” he added.
For a long time, NMPI has not really competed in the B-segment. The introduction of Almera will fill that void and put NMPI in a more competitive mode.
“This is the right product and the right price that could meet the big demand for this segment,” said Chen.
Lee Ceasar S. Junia, NMPI vice-president for marketing, sales and after sales division, said the company is targeting total sales this year to hit 4,000 units, more than double the 1,600 units the company sold in 2012.[SIZE="4"] NMPI employs 250 Filipino at its assembly plant in Sta. Rosa, Laguna, south of Manila, which operates a single shift operation.[/SIZE]
Junia expects the Almera to give existing B-segment players in the market a good competition. It is volume driven and could compete in terms of features and price point.
“We’ve no new model that really provided us the volume like Vios, City and other multi-purpose vehicle brands until we came up with Almera,” Junia said.
The 1.5 Almera has a starting price of P710,000 manual compared to Vios 1.3 with P690,000. NMPI said that Almera offers a good fuel efficiency, high affordability with C-segment space at a B-segment price.
The Almera alone is expected to contribute 250 units in sales a month and bring its total monthly CKD production to 350 from the current 80 to 100 units, Lee said. The 250 sales a month would give Almera a 15 percent share of the B-segment market, which offers a price range of P600,000 to P850,000 a unit.
The new model is being hyped as being built with “affordable dynamic sedan” in mind and elegant styling with great functionality.
Almera has successful launches in China, Thailand, Malaysia, US and India with global sales reaching already reaching more than 500,000 units.