Nissan sends Brexit shockwaves through UK motor industry

06 February, 2019, 10:39 | Author: Ann Santiago
  • Sharon Hodgson

One of the underlying reasons for the decision was uncertainty over Brexit which was adversely affecting business, noting: "The continued uncertainty around the UK's future relationship with the European Union is not helping companies like ours to plan for the future".

Britain promised Nissan up to 80 million pounds ($104 million) of support and offered Brexit-related assurances to help secure a major investment from the Japanese carmaker in 2016, according to a well-guarded letter released on Monday. "We remain seriously concerned though that the apprenticeships and additional jobs that come with future investment and which this community so desperately needs will be lost", said Unite's Steve Bush.

The FT quoted from a letter sent by business minister Greg Clark to then-Nissan boss Carlos Ghosn in which he promises to protect the auto sector as Britain leaves the European Union.

Nissan has reneged on a plan to make the next-generation X-Trail in the United Kingdom and will instead supply the European market with the crossover from its Kyushu plant in Japan.

The newspaper said that Greg Clark, the business secretary, was told by the vehicle giant that the switch of production from Sunderland to Japan was now "not negotiable".

"From a Brexit perspective, the one thing it highlights is the uncertainty". It will instead produce the X-Trail in Japan.

Nissan is also expected to benefit from building these cars in Japan and exporting them to Europe since the two sides recently ushered in a landmark free trade deal. North East business leaders have been saying 'We need clarity, we need some certainty'.

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Esther McVey insisted that Nissan's decision was nothing to do with Brexit, but Nissan's Europe boss later confirmed that Brexit uncertainty had played a part.

"It's not the individual model decision that is the problem, but the fact that we are expecting to see continued model decisions to be taken against the UK", he told Yahoo Finance UK.

However, professor Christian Stadler at Warwick Business School warned that Nissan could shift even more production in the event of no deal.

Yes, the uncertainty around the UK's future relationship with the European Union is unhelpful.

Other future models planned for Nissan Sunderland Plant are unaffected, including next-generation Juke and Qashqai.

However, the failure of Britain's government so far to negotiate a smooth exit plan from the EU has made auto manufacturers less willing to use Britain as a European manufacturing centre.

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