Nissan’s Sunderland car factory under threat as reports claim the Japanese firm will pull UK production of the new Qashqai SUV if there’s a no-deal Brexit
- Nissan committed to build the next Qashqai at Sunderland in November 2016
- However, that decision was contingent on a ‘soft’ Brexit arrangement
- The Financial Times says sources have confirmed that Nissan will reverse the move in the event of a no-deal Brexit
- That decision could put the Sunderland factory and 7,000 workers at risk
- Qashqai accounts for more than half the 440k cars built annually at the UK plant
Reports claim that Nissan will reconsider its decision to build the next-generation Qashqai at its Sunderland car plant if Britain opts to leave the EU without a deal, putting thousands of jobs at risk.
With production of the volume-selling family SUV pulled from the UK factory, the move could result in the eventual closure of the site.
The Financial Times broke the news on Tuesday, citing information from three different sources with knowledge of the matter.
UK jobs under threat: The Financial Times reports that Nissan will cancel plans to build the next-generation Qashqai at the Sunderland facility in the event of a no-deal Brexit
Nissan had announced back in November 2016 that it intended to build the next Qashqai at the UK factory, which currently employs around 7,000 workers.
This decision was made by former chairman Carlos Ghosn just five months before he stepped down as ceo of the car company and two years prior to his arrest on allegations of under-reporting his earnings and misuse of company assets.
Former prime minister Theresa May struck the deal with Nissan to ensure the Japanese firm built the model at the UK plant, which was celebrated as a huge boost to the government as it came in the months after Britain voted to leave the bloc.
A source at the time told Reuters that the government had promised extra support to Nissan in written assurances that Brexit would not hit the competitiveness of the plant, which exported 55 per cent of its cars to Europe.
However, following the departure – and demise – of Ghosn, Nissan has undertaken a global review of its operations.
It has since decided to cancel plans to assemble the forthcoming X-Trail SUV in Sunderland, which had also originally been put in place in November two years ago.
Production of the large off-roader will instead be based in Japan only.
The company also recently announced it would be cutting 12,500 jobs worldwide by 2022 – though just 90 of these are believed to be Sunderland based.
And in March it confirmed it would pull luxury brand Infiniti from the Europe entirely, including production of the Q30 premium model at the North East vehicle plant, which is the biggest in the UK.
Nissan Sunderland is the city’s biggest employer with around 7,000 staff in place currently
The Qashqai accounted for more than two-thirds of the 440,000 vehicles produced at the Sunderland factory last year, with more than half being shipped to Europe
Qashqais accounted for more than two-thirds of the 440,000 vehicles produced at the factory last year, with more than half of these being shipped across the Channel.
A decision to terminate production of the next version – due in 2020 – will ultimately leave the plant vulnerable to further downsizing and even closure.
The FT reports that the commitment to the UK was contingent on a soft Brexit arrangement, which includes a trade deal or transition arrangement.
In the event of a no-deal Brexit on 31 October, it suggests there could be a U-turn on that decision.
Nissan is quoted by the FT as saying it was ‘still waiting for clarity’ on what the UK’s relationship with the EU will eventually look like.
In June, Nissan confirmed it had built its ten millionth vehicle at the Sunderland plant – the first UK-based site to achieve that landmark
Nissan has this year already cancelled plans to assemble the forthcoming X-Trail SUV at the Sunderland plant
It joined the wider UK car industry by calling for negotiators to work towards a ‘mutually beneficial’ trade agreement that avoided the introduction of World Trade Organisation (WTO) rules.
The reports echo similar noises coming from Vauxhall’s owners, the PSA Group.
It warned in at the end of July that it would move European production of the Astra hatchback from Ellesmere Port in the even of a no-deal exit from the EU.
Ana Nicholls, industry director at The Economist Intelligence Unit said Nissan and other car makers have been ‘left with no choice’ but to review that commitments to the UK.
She told This is Money: ‘About 80 per cent of the Sunderland plant’s output is exported and a similar share of components are imported, mostly to and from the EU.
‘The no-deal Brexit could well disrupt that supply chain; as well as complicating paperwork and logistics, it would also add tariffs of 10 per cent for cars and 4.5 per cent for parts.’
The Japanese company also recently announced it would be cutting 12,500 jobs worldwide by 2022 , though just 90 of these are believed to be Sunderland based
The next-generation Qashqai is due in 2020. The car, which has always been built for the European market since it arrived in 2006, has long been the UK’s best-selling SUV