Nissan’s Sunderland plant still under threat under no-deal Brexit

Wednesday, 3rd June 2020, 1:44 pm
Updated Wednesday, 3rd June 2020, 1:45 pm
(Photo: Nissan)
(Photo: Nissan)

Nissan has warned that the future of its Sunderland factory could still be in doubt if Britain leaves the EU without a trade deal.

The Japanese brand’s global chief operating officer, Ashwani Gupta, said that while Nissan wanted to keep the plant open, tariffs associated with a no-deal Brexit could make it unsustainable.

He told the BBC that the EU was the biggest customer for vehicles built at Sunderland, with around 70 per cent of cars from there going to the EU. And he said that a 10 per cent tariff - which would be the default World Trade Organisation rate in the event of no-deal - would mean such an arrangement was not viable.

He said: “You know we are the number one carmaker in the UK and we want to continue. We are committed. Having said that, if we are not getting the current tariffs, it's not our intention but the business will not be sustainable. That's what everybody has to understand.”

Cost-cutting

Nissan had previously warned of the impact of Brexit on the Sunderland site but it had been hoped that Sunderland’s future was secure after the firm announced it was shutting its Barcelona factory as part of £2.3 billion cost-cutting measures.

The factory is Britain’s largest car plant, with nearly 7,000 staff producing the Qashqai, Juke and Leaf models. During lockdown it has been producing PPE but is scheduled to resume car production this month.

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It had been suggested that Nissan’s partner Renault could move some of its production to Sunderland to take up spare capacity and improve the plant’s viability but Mr Gupta said such a move was up to the French car maker. He added: “Each company will take the decision based on the competitiveness of the plants."

Renault, which is part owned by the French government said last week it had no plans to move any production to the UK and is itself cutting 14,600 jobs worldwide as part of a £1.8bn savings plan.

Nissan builds the Leaf, Qashqai and Juke at Sunderland but exports 70% of vehicles to Europe (Photo: Nissan)

UK and EU negotiators have just begun a fourth round of talks aimed at reaching a trade agreement that would avoid defaulting to WTO tariffs. EU lead negotiator Michel Barnier said said last week the EU would consider a two-year Brexit delay but his UK counterpart David Frost insisted that the UK position remained to leave the EU on December 31 with or without a deal in place.

Nissan’s warning comes a week after Ford warned that it may have to close all of its UK factories if the Government does not offer some form of incentive to stimulate the new car market, such as a scrappage scheme.