Nissan Reverses UK Investment Decision

The failure of Britain's government so far to negotiate a smooth exit plan from the European Union has made car manufacturers less willing to use Britain as a European manufacturing centre

Nissan Reverses UK Investment Decision

The chairman of Nissan Europe, Gianluca de Ficchy said: 'We appreciate this ...

The business secretary promised Nissan in 2016 that supporting carmakers would be "a critical priority" in the Brexit talks, in a previously confidential letter released by the company after it abandoned plans to produce a new model in Sunderland.

Representatives of the Unite union met Nissan managers on Monday and said they would push to secure the future of the Sunderland site.

While Nissan's decision to keep X-Trail production in Japan will have no immediate effect on jobs in Britain, it represents the cancellation of increased capacity in Sunderland and the creation of a so-called "super site", which local component makers had been gearing up to supply.

The Sunderland plant is the UK's biggest vehicle production plant and its supply chain employs around 15,000 people, who could all potentially be affected. On Sunday, Nissan said it would consolidate production of the next-generation X-Trail in Japan, citing Brexit concerns and falling diesel sales. But it's not expected to be the last as Brexit uncertainty bites.

Whist the company claims that existing production and the nearly 7000 jobs at the plant are safe, the decision to cancel X-trail production at the site - which was expected to create hundreds of new jobs - has caused a great deal of concern.

The British auto industry has already seen a dramatic drop in investment since the vote, and business leaders have warned of further blows to the sector after the UK's withdrawal.

Nissan confirmed it would build both the new Qashqai and the X-Trail SUV at its Sunderland plant after all.

She said: "Of course Brexit was not the only reason but it was pretty prominent in Nissan's decision".

"It's not the individual model decision that is the problem, but the fact that we are expecting to see continued model decisions to be taken against the UK", he told Yahoo Finance UK.

Nissan's Sunderland factory builds the Juke, Qashqai and eco-friendly Leaf models.

Britain is due to leave the bloc on March 29, and many businesses fear economic chaos if there isn't an agreement on the rules and conditions that will replace the 45 years of frictionless trade that came with being an European Union member.

Nissan had pledged to manufacture the new SUV model in the United Kingdom four months after the referendum - a move seen as a major vote of confidence in the country's manufacturing outside the EU.

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