Nissan: UK factory still under threat from no-deal Brexit - CILT(UK)
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Nissan: UK factory still under threat from no-deal Brexit

03 June 2020/Categories: CILT, Industry News, Logistics & Supply Chain, Operations Management


The UK's largest car manufacturing plant is "unsustainable" if the UK leaves the European Union without a trade deal, owner Nissan says.

The Japanese company's global chief operating head told the BBC people had to understand the EU was the Sunderland factory's biggest customer.

Ashwani Gupta said that Nissan's commitment could not be maintained if there was not tariff-free EU access.

Nissan has invested billions of pounds in the plant, which has 7,000 workers.

His comments come despite the Sunderland site surviving this week's announcement on the Japanese giant's global restructuring programme.

Mr Gupta 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."

Crucial talks

He also said that any plans for its strategic partner and 43%-shareholder Renault to take up spare capacity at Sunderland would be a matter for the French carmaker. The French government has a 15% stake in Renault.

This is not the first time that Nissan has pleaded with UK and EU negotiators to ensure that the 70% of cars manufactured at Sunderland which are sold in the EU can avoid tariffs of 10% under World Trade Organisation rules - the legal default position if a deal is not struck.

Those talks resumed this week, with the differences between the UK and EU being described on all sides as deep and wide.

Last week, the EU's chief negotiator Michel Barnier said the EU would consider a two-year Brexit delay, which was rebuffed by his UK counterpart David Frost, who told MPs the government's policy remains not to extend the transition period beyond the end of the year.

Under an agreement signed last year, the UK has until the end of this month to decide whether it wants to request such an extension so the coming weeks are crucial.

The comments by Nissan may dampen hopes raised just last week when the company said that while it was closing plants in Spain and Indonesia, it remained committed to Sunderland.

An announcement by Nissan that Renault might take the European lead in the companies' global manufacturing alliance (which also includes Mitsubishi) by taking up an estimated 20% spare capacity at Sunderland were quashed for the foreseeable future by Renault last week, when it said it had no current plans to move in to the UK.

China growth

Mr Gupta confirmed that any decision by its partners would be a matter for them, and that no such deal had been agreed. "When it comes to the allocation of manufacturing, each company will take the decision based on the competitiveness of the plants."

Nissan is a huge fan of the Sunderland plant and paid tribute to the efficiency and hard work of the operation. But it reiterated that was not enough to secure its long-term future if tariffs were imposed in a market which it described last week as "non-core". It only has a 3% market share of the vehicle market in Europe.

On a more encouraging note, Mr Gupta said recent sales figures from China showed the world's biggest car market was recovering fast and the company was winning market share. But vehicles for that market are not produced in the UK.

It is still possible that Renault could decide to move production of certain vehicles to Sunderland. But it is hard to see how a company which is 15%-owned by the French taxpayer could find a way to make that work where Nissan, which has been in Sunderland for 40 years, says it cannot.

Nissan's comments are a timely reminder that for many key industries, the Brexit issue - which has not been silenced by coronavirus news - has in many ways been amplified by it.

Source: BBC

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