Nissan’s European factories “unsustainable” under no-deal Brexit

Firm’s European chairman says WTO trade regulations would pose an “enormous problem” and create unsustainable tariffs

Nissan’s head of European operations has said a no-deal Brexit and the implementation of World Trade Organisation tariffs would render its European operations unsustainable, putting the future of the firm’s Sunderland plant at risk.

Speaking at the firm’s Sunderland factory as production of the new Juke began, Nissan’s Gianluca de Ficchy highlighted that WTO tariffs (which would be imposed by default if the UK leaves the EU without a deal) would bring 10 percent export duties imposed on UK-made cars shipped to Europe.

• Nissan confirms 12,500 global job cuts

“If we will have to sustain 10% export duties on the vehicles that we export from UK to EU, knowing that those vehicles represent 70% of total production, the overall business model won’t be sustainable”, de Ficchy told the BBC.

de Ficchy highlighted that there “there are many alternatives” to a no-deal scenario, but added that there is also “a lot of uncertainty.” Nissan’s Sunderland plant is at the heart of the firm’s European production operations, with the Qashqai, Leaf and new Juke all built at the factory. Some 7,000 people are employed at the plant, with a further 24,000 UK jobs supported by its operations. The company also has manufacturing operations in Spain, though these are based around commercial vehicles. 

“It’s not a question of Sunderland, it’s a question of the overall economic sustainability of our business [in Europe]”, de Ficchy added. “We are asking not to have tariffs being applied in a no-deal scenario because otherwise the tariffs won’t be sustainable for us.”

Nissan’s Sunderland plant at risk from no-deal Brexit, reports indicate

Nissan is to review the future of its Sunderland plant in the event of a no-deal Brexit, according to reports. 

The Financial Times claims “three people with knowledge of the matter” say the factory’s future would be reassessed if the UK reverts to World Trade Organisation rules after leaving the EU without a deal, potentially putting the plant’s future at risk. 

The Sunderland plant directly employs 6,700 people and supports a further 27,000 UK supply chain jobs, three-quarters of which are in North East England.

Nissan builds the Qashqai SUV and the Leaf EV in Sunderland, as well as the second-generation Juke. The car maker previously reversed a decision to bring X-Trail production to the plant, while in 2016 the UK government offered Nissan post-Brexit financial incentives of up to £60 million.

But recent years have been hard for Nissan. Earlier in the year, the firm announced it was cutting around nine per cent of its global workforce amid a fall in profits, while former chairman Carlos Ghosn is under investigation by Japanese authorities for allegedly under declaring his pay, and a number of other alleged instances of misconduct. 

A Nissan spokesperson told Auto Express: “While we don’t comment on speculative scenarios, our plans for Qashqai production in Sunderland have not changed.”

The firm reiterated its position on Brexit: “Frictionless trade has enabled the growth that has seen our Sunderland plant become the biggest factory in the history of the UK car industry, exporting more than half of its production to the EU.

“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.

• European car makers warn of “irreversible” no-deal Brexit effects

“As a sudden change from the current arrangements 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 Nissan’s response to these reports is equivocal, Vauxhall’s owner PSA has explicitly stated that its decision to continue manufacturing cars at Ellesmere Port is “conditional on the final terms of the UK’s exit from the European Union.”

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