Nissan’s UK plant under threat with SUV production relocation

Nissan's UK plant under threat with SUV production relocation

2 October 2019

Nissan could move its SUV production out of the UK after Brexit, as the future of its plant in Sunderland remains uncertain.

Manufacturing of the carmaker's Qashqai model could move to Spain while its Juke may be built in another overseas plant, according to reports. This follows the decision not to bring X-Trail production to the UK due to the uncertain future Brexit is causing.

The carmaker is already considering cutting facilities and jobs as it looks to turn around huge losses, and with Honda and Ford already shutting plants in Britain, and PSA refusing to commit to manufacturing in the country, Nissan could be the next to deliver a ′Brexit blow' to the automotive industry.

Old guard gone

Former Prime Minister Theresa May struck a deal with then Nissan chairman Carlos Ghosn back in 2016, to ensure the carmaker continued to build the Qashqai in Britain, a move that was said to contain written assurances that Brexit would not hit the plant, which exports 55% of its cars to Europe.

However, both Ghosn and May are now gone, and the UK finds itself entering deeper uncertainty, with a deadline of 31 October to agree on a deal with the EU or leave regardless, a move that would trigger tariffs on imports and exports and potential delays at customs.

In an email to the Financial Times, Nissan said: ′Today we are among those companies with major investments in the UK who are still waiting for clarity on what the future trading relationship between the UK and the EU will look like.

′As a sudden change from those rules to the rules of the WTO will have serious implications for British industry, we urge UK and EU negotiators to work collaboratively towards an orderly balanced Brexit that will continue to encourage mutually beneficial trade.

′While we don't comment on speculative scenarios, our plans for Qashqai production in Sunderland have not changed.'

Workforce threat

Sunderland employs 7,000 people and in addition to the SUV models, also produces the Leaf electric vehicle (EV) for Europe. Losing the Qashqai and Juke would mean a significant reduction in the workforce and threaten its future completely by making it difficult to win production of new models.

Under a trade deal between Japan and the EU, Nissan would be able to export the Qashqai from its home market to Europe without tariffs, while its UK-built cars may face tariffs when selling to Europe after Brexit. This was likely a reason for the change in plans on X-Trail production, with the car now manufactured in Nissan's home country.

The company has said it is to cut 12,500 jobs globally and reduce both production capacity and the number of models it produces by 10% by the end of 2022.