Nikon officially announced the closure of their camera plant in China

Nikon officially announced the previously rumored closure of their digital camera plant in China:

Nikon to Discontinue Operation s of a Consolidated Chinese Manufacturing Subsidiary of Imaging Business

Nikon Corporation (the “Company”) has announced at the Board of Directors ’ Meeting held today the resolution that operation s of consolidated subsidiary Nikon Imaging (China) Co., Ltd. will be discontinued.

Reason for Discontinued Operations

Nikon Imaging (CChina)) Co., Ltd. (NNIC) was established in June, 2002 in Wuxi City, Jiangsu Province, China, and manufactured digital cameras and lens units for digital cameras. In recent years, however, due to the rise of smartphones, the compact digital camera market has been shrinking rapidly, leading to a significant decrease in operating rate at NIC and creating a difficult business environment.

In this context, the Company conducted rounds of thorough reviews and discussions on the global manufacturing structure optimization measures stated in the company-wide restructuring plan announced by the Company in November 2016. The Company has decided to discontinue operation s of NIC. Thereafter, we will begin conducting relevant dissolution and liquidation procedures of NIC. Specific details will be notified separately according to the decision.

As part of restructuring the Imaging Products Business, the Company will focus more on high value-add products. China’s position as one of the most important markets in the world will remain unchanged. Nikon Imaging (China) Sales Co., Ltd. (NICS), the Company’s sales subsidiary in Shanghai, continues in full operation as normal, contributes to photo and imaging culture development, and strengthen s the sales effort of imaging products and the after - sale services in China that meet customers’ satisfaction.

Moreover, besides NIC, the rest of the Company’s manufacturing and sales subsidiaries in China remain in full operation, and continue proactively developing business and services in China.

Source: Nikon

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  • Dave Stromberger

    What does this mean exactly? Will all Nikon cameras and lenses be made in Japan or Thailand from now on?

    • Yes, I think so. It also means lower costs of opartion, higher profits – see my next post.

    • Thom Hogan

      Wuxi made Coolpix and Nikon 1 products mostly. They also assembled some lenses.

      • Jeff Curtner

        I visited the Wuxi factory back in 2012 in a press tour. They built some high-end Coolpix and Nikon 1. Apparently not all the Coolpix products were made in Wuxi as I didn’t see the low-end ones. Nikon 1 was the main product in that factory, taken up 40% of the factory floor space.

        Also during the official presentation they mentioned there are three Nikon factories in China, including one in Foshan near Guangzhou. It’s well known that the Foshan factory has been making lenses for long time such as the good old AF 50/1.8, long before the Wuxi factory opening.

        However, the business nature of the Foshan factory is unknown, it could be a joint venture from the 90’s instead of Nikon subsidiary like the Wuxi factory.

        Some of the modern lenses are made in China but I don’t know if they are made in Foshan or Wuxi. The Wuxi factory is quite modern one. The peak employment number was over 10,000 right after Nikon 1 was launched.

        I’d guess the slow death of Nikon 1 is one of the main reasons of closure but it’s easy to blame the decline of DC instead of Nikon 1.

        An interesting thing I found during the tour is that they employed a lot of low-tech manufacturing techniques in the Wuxi factory, such as hand paining the letters of Nikon and model names whereas right next to the hand painting workstations there were a couple automated machines painting letters to Nikon 1 lenses. When I asked them why not automating all the letter painting process, they told us it’s a cost issue. If a humanoid can paint less than a machine they will not buy a machine for that process.

        Which brings up another unspoken closure reason: the declining foreign business environment in China. Government back anti Japan sentiment is one, but overall attitude toward foreign investment community is getting back. Cost of labor and land have risen a lot since last time I visited there. I’d guess the labor cost alone has risen at least 30-50% in five years. Recent crack down on pollution has resulted in a lot of small factories being closed but that’s probably not a direct cause to the Wuxi factory closure.

    • Adnan

      Some parts n PnS cameras will be made in Malaysia or Indonesia as they already make parts there.

  • Delmar Mineard Jr

    My concern is the movement of lenses to other non-Nikon factories. If it stays in a Nikon factory in Thailand or Japan, no issue. No surprise with plant closing due to the low volume of entry level cameras (point & shoot).

  • Tieu Ngao

    Nikon is in the process of cost cutting, so it makes sense to close a factory that mainly produces P&S cameras that are no longer commercially viable.

    • Thom Hogan

      I’ve been waiting for this announcement. Hints of it have been trickling out since the big year-end write-offs last year. And it’s way overdue. Nikon simply doesn’t have the volume to justify the plant.

      • This also probably explains why the P900 replacement is not announced yet. It has been rumored for a while and I am sure my sources are correct.

  • Barry R. Burgess

    What does this mean for Nikon 1? As far as I know all nikon 1 cameras and lenses are made in China. Nikon said very recently that the Nikon 1 was not discontinued and that the J5 was selling well.I wish Nikon would be more transparent when asked about the future of the Nikon 1. If they discontinue the Nikon 1, they have not been truthful since they must have discussed the closure of the China plant for some time. I own the V1 and V2 the CX 70-300 and 32mm f1.2 along with several other lenses. The V2 and CX 70-300 works very well for bird photography in good light.I would be very disappointed in Nikon if they discontinue the System. I am not happy since it has been so long since the last body was released. All they need for now is to make a J5 with optional accessory viewfinder, how hard can that be? I did not buy the V3 because of the micro SD card slot,, aparently you have to remove the grip to change the battery and why not a conventional flash? It is like they did not think much during the design process. If there is room for a slightly larger sensor in a CX mount or Organic sensor tech becomes a realitry they would not need a new mirrorless sistem,and save a lot of money on development costs. Most mirrorless systems did not deliver much of the size weight advantage promised except the micro 4/3 system and Nikon 1 system. You really can see the advantages of the 1 system and micro 4/3 when using telephoto lenses. If the next generation of sensors or a slightly larger sensor in a CX mount rival micro 4/3 quality the system will become a sucess provided they do not over charge for it.Right now the image quality of the latest nikon 1 is approaching that of micro 4/3.

    • Spy Black

      Well, there’s this:
      “Moreover, besides NIC, the rest of the Company’s manufacturing and sales subsidiaries in China remain in full operation…”

      So, what else exactly is manufactured in China? Although I would write off N1 at this point, I wonder if whatever minimalist N1 manufacturing can continue at the other plants?

      • MB

        Nikon has couple more plants in China …
        http://www.nikon.com/about/corporate/profile/group/index.htm
        As you can see among digital cameras components they also manufacture microscopes and objective lenses for microscopes there …
        But most of the assembly work will be moved to Thailand and Laos … and maybe returned to Japan … 105 production was organized in this plant because Nikon 1 production effectively stooped and they had to do something …

        • Jeff Curtner

          I mentioned Foshan factory but it’s not in this list. The Dongguan and Hangzhou factories are probably relatively new.

    • Well, they can move the production to another location but at that point I think the Nikon 1 is dead. I just don’t see them making any more Nikon 1 cameras and lenses. If they had such plans for Nikon 1, they were going to mentioned them in the press release.

      • Eric Calabros

        Wherever their upcoming large sensor mirrorless is going to be made, is able to make next generation of N1. The problem is they can’t (or they think its not feasible to) make new lenses for the system to keep it alive when they have to support FX/DX and the new mount simultaneously.

        • Thom Hogan

          No, the real problem is that if demand for any new mirrorless system is high and demand for the DSLRs doesn’t drop off too much, the Thailand plant wouldn’t really be able to produce N1 in any quantity.

          Frankly, Nikon is in a tough spot. Canon seems set to roll APS-C through the GX line, and they seem to be selling GX. Without N1 Nikon has nothing in that space (not that it’s perfectly in that space any more).

    • Thom Hogan

      It means this: even if the Nikon 1 is continued in some way, Nikon doesn’t perceive it as a volume product. They would try to squeeze any continued N1 production into Thailand, probably. That’s very possible to do, but given that almost everything is moving through Thailand now, it means that Nikon wouldn’t have a huge capacity for N1 there.

  • TwoStrayCats

    So, that astounding 105 f1.4 is now going to be produced in Thailand?

    • CaMeRa QuEsT

      I’ll expect strained stock levels going forward on the newer, more popular lenses that came from this factory, including perhaps the 105/1.4 and the 200-500/f5.6.

      • ITN

        They will just move production of these lenses to their other factories.

  • Semaphore

    If Nikon wanted to continue making Nikon 1, they could easily shift production elsewhere. The problem is either Nikon has given up on N1 entirely, or they realised they can’t announce anything new at the moment because to do so would be a PR disaster (since everyone’s waiting for a FX/DX mirrorless offering).

    • they gave up the consumermarket because of smartphone. Its a loss busines for everyone and you will see them all bail out to limit losses. But as i wrote today Nikon could learn a lot from the smartphone business

  • Wesley

    Why not retrofit it to create some D850 / high end component?

    They obviously need MORE factories.

    • BVS

      Probably because by the time they retrofit it the backlog of D850 orders will already be fulfilled.

  • br0xibear

    It even made it’s way onto mainstream media ?…

    https://www.youtube.com/watch?v=dh4i_W65Zmg

    • I will add the video to my post, thanks!

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