Abu Dhabi, UAEFriday 15 November 2019

Nissan's future in Europe 'unsustainable' with no-deal Brexit tariffs

Long-term future of car maker's huge Sunderland plant would be in doubt if 10% WTO tariffs were introduced, executive says

Chairman of Nissan Europe, Gianluca de Ficchy, says "entire business model of Nissan in Europe will be in jeopardy" if 10% WTO tariffs are imposed under a no-deal Brexit. AP Photo.
Chairman of Nissan Europe, Gianluca de Ficchy, says "entire business model of Nissan in Europe will be in jeopardy" if 10% WTO tariffs are imposed under a no-deal Brexit. AP Photo.

No-deal Brexit tariffs of 10 per cent on vehicles would be unsustainable for Nissan in Europe, where it runs Britain's biggest car factory, the Japanese company warned on Thursday.

The car maker made nearly one in three of Britain's 1.5 million cars last year at its northern English Sunderland plant, although annual production levels at the site will drop this year.

Nissan, which was encouraged by then Prime Minister Margaret Thatcher in the 1980s to use Britain as a gateway to continental Europe, has spent £100 million (Dh455m) on investment in a new Juke model, due to begin production next week.

But the automotive sector, Britain's biggest exporter of goods, is concerned that World Trade Organisation tariffs of 10 per cent on vehicles alongside new customs checks and delays could halt production if there is a disorderly Brexit on October 31.

"If we are in a situation in which tomorrow we will have to apply 10 per cent export duties to 70 per cent of our production, the entire business model of Nissan in Europe will be in jeopardy," the firm's European Chairman Gianluca de Ficchy told reporters.

"If there will be a no-deal — and a no-deal will be associated with WTO tariffs application — that won't be sustainable for us," he added.

Prime Minister Boris Johnson has said he is prepared to take Britain out of the European Union without an agreement but is seeking a deal with the bloc, although time is running out to secure an orderly departure before the deadline in three weeks.

Ministers have said they are prepared for a no-deal outcome and could help affected sectors. Brexiteers have long argued that Europe’s biggest economy, Germany, which exports hundreds of thousands of cars to Britain each year, would protect that trade.

Nissan said it was examining a host of scenarios and wants the tariffs not to be applied if Britain leaves the bloc without an agreement.

"We are asking not to have tariffs being applied in a no-deal scenario because otherwise the tariffs won't be sustainable for us," De Ficchy said.

In 2016, Nissan said it would build its next-generation Qashqai vehicle at the factory, key to maintaining staff levels of around 6,000 people at the site and an example of how far in advance major decisions are taken.

The assumption is that investment will go ahead, De Ficchy said on Thursday, but warned that Nissan would need to react if there were a no-deal outcome, although decisions involving plants might take time.

"We are conscious about the need to react quickly," he said. "But at the same time no quick decision may be taken because the complexity around that scenario is really big."

Updated: October 10, 2019 08:50 PM

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