Abu Dhabi, UAEMonday 20 May 2019

Nissan pulls plug on new model amid Brexit concern

Decision not to build new X-Trail in UK spurred by uncertainty over Britain's divorce from EU, Japanese car maker says

New X-Trail will not now be built at Nissan's plant in Sunderland, north-east England. AFP
New X-Trail will not now be built at Nissan's plant in Sunderland, north-east England. AFP

Car maker Nissan has scrapped plans to build its new X-Trail 4x4 in Britain, saying it had taken the decision to consolidate production in Japan and warning two months before Brexit that uncertainty was making it harder to plan for the future.

Nissan said four months after Britain voted to leave the European Union in June 2016 that it would manufacture the new X-Trail in Britain, which was seen as a major vote of confidence in the country and then new Prime Minister Theresa May.

A source said Nissan received a letter from the government at the time promising extra support in the event that Britain's departure from the European Union hit the competitiveness of its Sunderland plant in north-east England.

But on Sunday, Nissan, which operates Britain's single-biggest car factory where it built approximately 30 per cent of the country's 1.52 million cars produced last year, said it was reversing that decision. "The company has decided to optimise its investments in Europe by consolidating X-Trail production in Kyushu, the production hub for this global model," Nissan said on Sunday.

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"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," said Europe chairman Gianluca de Ficchy.

The company said planned investment in the next-generation Juke and Qashqai, also announced in 2016, was unaffected. Last year Nissan cut hundreds of jobs at the Sunderland factory in response to declining demand for diesel models, Reuters said. Production at the site fell 11 per cent in 2018.

Sunday's news comes after the British automotive industry saw investment plunge last year amid mounting concern about the impact of a hard Brexit.

Spending plunged 46 per cent to £589 million (Dh2.82 billion), the lowest since the global financial crisis, Bloomberg reported the the Society of Motor Manufacturers as saying on Thursday.

Concern about the impact of a possible no-deal split on supply chains and demand has prompted companies to devote less cash to the UK, the society said.

Updated: February 4, 2019 10:42 AM

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