Nikon Brasil To Close By Year’s End | Good Financial Decision or Desperate Action?
Within a week of Nikon announcing the closure of their factory in China, citing the responsibility on the smartphone market, Nikon has announced that it will cease the sale of its products through the e-commerce store in Brasil by the end of the year. The statement, which can be found here, when translated reads:
Nikon do Brasil Ltda. announces the closure of e-commerce in Brasil
Nikon Corporation is optimizing R & D, Sales and Manufacturing structures in a global scale restructuring.
As part of this process, Nikon do Brasil Ltda. – from December 31, 2017 will close the sale of cameras, lenses and photographic accessories for the Brasilian market, currently marketed exclusively through its e-commerce, the Nikon Store. The company’s other business segments, including customer service and technical assistance, will continue to operate normally in Brasil.
Products under warranty, including those marketed by Nikon Brasil’s e-commerce through December 31, 2017, will continue to honor the warranty periods. For out-of-warranty products, where possible, technical assistance will be provided based on costs approved by the owners.
São Paulo, November 6, 2017.
President – Nikon do Brasil
[REWIND: Nikon Closes Chinese Factory & Rests Responsibility On SmartPhones | Expect More Bad News For Nikon In 6 Months]
As mentioned in the release, the change stems as part of ‘global scale restructuring’ of the company’s R&D and sales and manufacturing. However, it is almost impossible to talk about the sale of electronics in Brasil without mentioning the ‘Brasil cost’ (‘Custo Brasil’).
Taxation is a recurring theme when you ask Brasilians about the cost of many imported goods. The Brasil Cost is a series of steep taxes and import tariffs that have sent prices upwards in Brasil, especially in the electronics market. This taxation applies to products that are manufactured both locally and imported, which are affected by the structural problems of the country.
Imported smartphones, digital cameras, and other electronics are subject to a 10 – 35% tariff in addition to multiple fees and taxes at both the state and federal level. For an example, a 64 GB iPad Pro at B&H that would cost $600 in the US could cost more than $960 at a local electronics store in Rio.
Foreign technology companies like Huawei, Nokia, and Foxconn (which makes parts for both Sony and Apple) have avoided tariffs and taxes by setting up manufacturing facilities in Brasil, but Nikon’s presence in Brasil is only as an e-commerce store and the cameras and lenses they sell are imported from Japan and Thailand which are subject to the high tariffs. Leaving the Brasillian market is power financial decision on the company’s part as they are not forced to pay for the countries unstable infrastructure. Brasil, however, is an enormous country and a large consumer market, and one has to wonder how this might affect Nikon’s sales as their presence may be less.
Until the time comes for Nikon’s departure, products purchased through the Nikon Brasil Store before December 31st and products still under warranty will continue to have access to customer service.