Nissan has confirmed that the new X-Trail car model – originally planned to be produced at its Sunderland plant – will shift production to Japan.
In 2016, Nissan said it would build the car in the UK after “assurances” from the British government, but in a letter to workers, Nissan said that the unending Brexit uncertainty makes it difficult for firms to “plan for the future“.
The British government said that the car manufactures decision was “a blow to the sector” but ensured that no jobs would be lost.
Nissan also said that since 2016 “the environment for the car industry in Europe has changed dramatically“, adding the “changing emissions regulations” as a reason.
If diesel cars fail to meet the latest British emissions standards face a charge and a number of European countries, including the UK, have announced bans on both new diesel and petrol vehicles in the future.
Consequently, new diesel car sales declined by 30% in 2018 in Britain, according to the Society of Motor Manufacturers and Traders.
Nissan was also going to build the X-Trail model at its Kyushu plant but decided two years ago, “there was a good business case for bringing production to Europe as well,” according to its Europe chairman, Gianluca de Ficchy.
Now, he stated that Nissan is intending “to optimise our investments and concentrate production in Kyushu, instead of adding another production site“.
He also added: “Nissan is investing heavily in new technologies and powertrains for the next generation of vehicles in our Sunderland plant. To support this, we are taking advantage of our global assets, and with X-Trail already manufactured in Japan, we can reduce our upfront investment costs. While we have taken this decision for business reasons, the continued uncertainty around the UK’s future relationship with the EU is not helping companies like ours to plan for the future,” he added.”
In the eyes of a no Brexit deal, several carmakers, including Jagua, Toyota and Vauxhall have expressed uncertainties of disrupting their supply chains.
The UK’s Business Secretary Greg Clark responded to the issue by saying: “Nissan’s announcement is a blow to the sector and the region, as this was to be a further significant expansion of the site and the workforce. The company has confirmed that no jobs will be lost. They have reiterated today their commitment to the UK by continuing to manufacture in Sunderland the current Qashqai, Leaf and Juke models and the new Qashqai model from 2020.”
Steve Bush, Unite’s acting national officer for the car sector, stated: “This is very disappointing news for Sunderland and the North East and reflects the serious challenges facing the entire UK auto sector.”
The MP for Sunderland Julie Elliott said the news was “devastating news for our city and the region“.
Jeremy Corbyn, leader of the Labour party said: “The Conservatives’ botched negotiations and threat of a no-deal Brexit is causing uncertainty and damaging Britain’s economy.”
News emerged on Monday of a deal between the Government and Nissan where there would be paid £80m in Brexit assurances. It is thought they may still receive over £60m, despite scrapping the plans to build it’s new model in the UK.