Nissan cancels production of new model in UK, citing Brexit concerns
Japanese car-maker Nissan has announced that it is scrapping plans for production of a new model in its UK factory in Sunderland, saying uncertainties surrounding the country's planned withdrawal from the European Union were affecting its policies.
Nissan’s Europe chairman, Gianluca de Ficchy, said on Sunday that the company would move the planned production of the new X-Trail in Sunderland to Kyushu in Japan to optimize investment in Europe.
De Ficchy said Nissan’s decision to reduce production levels in the UK was not directly linked to Brexit but he insisted that the company was being affected by the political uncertainty surrounding the issue.
“While we have taken this decision for business reasons, the continued uncertainty around the UK's future relationship with the EU is not helping companies like ours to plan for the future,” he said.
Major companies have announced plans for reduction of their activities in Britain once the country leaves the EU at the end of March. Most of those companies have cited increased costs and feared disruptions to their supply chain as main reasons for revising production policies for the UK.
Nissan’s Sunderland factory, located in northeast England and established in 1986, currently employs almost 7,000 people.
The company’s plans for production of X-Trail in the UK, which had been finalized in 2016 following London's pledges to support the scheme, could create many more jobs and drastically improve the economic situation in the region.
The UK government reacted to Nissan’s Sunday announcement by admitting that it was a blow to the automotive sector in the country.
“Nissan's announcement is a blow to the sector and the region, as this was to be a further significant expansion of the site and the workforce,” said Business Secretary Greg Clark, adding, however, that Nissan had ensured that no jobs would be lost in the plant in Sunderland and production of current models would continue.
Opposition Labour Party leader Jeremy Corbyn said the announcement was another sign the Conservative-led government’s inability to secure a smooth Brexit was hurting the economy.
“The Conservatives' botched negotiations and threat of a no-deal Brexit is causing uncertainty and damaging Britain's economy,” said Corbyn.
However, pro-Brexit politicians and members of the government denied Nissan’s decision had anything to do with Brexit, saying the company was already experiencing problems in the UK and back in Japan that had made such moves inevitable.
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