Nissan formally closes Indonesian factory

Automaker Nissan Motor Indonesia (NMI) announced the official closure of its factory in Indonesia as its Japanese parent company disclosed a restructuring plan to improve its finances.

Japan’s Nissan Motor Co. stated on Thursday that the company was taking robust action to improve efficiency, which included the closure of its manufacturing facility in Indonesia. It also closed its Barcelona plant, the Spanish government confirmed.

NMI’s spokesperson Hana Maharani said Nissan Motor Co.’s announcement formalizes the closure of NMI’s factory in Purwakarta, West Java, which had stopped activities in March.

“We have stopped our production line back in March. Therefore, the next step taken is to close the facility,” she said in a text message to The Jakarta Post on Thursday, adding that the announcement only served as a “formality.”

As Japan’s Nissan factory in Indonesia is facing closure, the company is concentrating on its plant in Thailand as the single production base in ASEAN, its statement reads.

Nissan Motor Co. said in April that it expected an annual operating loss of up to 45 billion yen (US$417 million), its worst performance since the 2008-2009 financial crisis.

The decision to stop its operations in Purwakarta was part of the company’s optimization plan, which includes “rightsizing” and reorganizing its business operations, NMI president director Isao Sekiguchi said in a statement earlier in March, as quoted by Tempo.co.

NMI had opened its Purwakarta factory, which assembles several models, including the Nissan March, X-Trail and Serena, in 2014. It also produced models for the Datsun brand, namely Datsun Go Panca and Datsun GO+ Panca.

Car sales in Indonesia nosedived in April by more than 90 percent year-on-year (yoy) to 7,871 units, according to data compiled by diversified conglomerate PT Astra International, as the economic impact of COVID-19 affects vehicle demand.

The Association of Indonesian Automotive Manufacturers (Gaikindo) cut its domestic car sales target this year by 40 percent to just 600,000 units and its car export target to 175,000 units from the initial target of around 350,000 and 400,000, the association’s chairman Yohannes Nangoi has said.