UK car exports rise to highest-ever level

There was more good news for the economy yesterday when figures revealed UK car production and exports this year hit new highs.

Almost 170,000 vehicles were manufactured last month, said the report by the Society of Motor Manufacturers and Traders (SMMT), with demand in the UK and abroad rising 14 and 12.5 per cent.

For the year to the end of November, a total of 1.61 million cars were produced in the UK, up almost ten per cent on last year, despite a brief dip in October, and the highest for the first 11 months since 1999.

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The Guardian adds that the total of 1.25 million cars exported in that time represents the "highest ever" level of overseas demand.

Coming on the back of data showing booming retail sales in the run-up to Christmas, this adds to the view that fourth-quarter economic growth will be impressive.

However, the SMMT warned that the positive momentum depends heavily on the sort of Brexit deal that is struck by ministers.

SMMT chief executive Mike Hawes met Brexit Secretary David Davis last week and is said to have emphasised that the UK's car manufacturers have hugely benefitted from being in the EU single market, says The Times.

While there seems to be agreement that the "British-made" badge is carrying increasing cache abroad, manufacturers point out that the falling pound is boosting price competitiveness. The SMMT argues this will only continue if the Brexit trade deal with the remaining EU is favourable and British cars can continue to be sold without tariffs.

The trade body has previously noted that the EU accounts for about half of all UK car exports.

Hawes said: "Made in Britain is a badge coveted by car buyers worldwide and these latest figures highlight not just that international appeal but the fact that the UK is a globally competitive place to make cars.

"These latest results… will continue only if we can maintain the competitive trading conditions that have enabled the UK to become an automotive success story."

EU watchdog queries Nissan's Brexit deal

8 November

The UK's deal with Nissan is to be investigated by the European Commission over concerns that the UK government may have given financial assurances that breach single market rules.

Officials in Brussels have asked the British government for details of the assurances it gave the Japanese carmaker relating to the period after Brexit in 2019 "over fears that the government might have breached EU rules preventing unfair state aid to companies", says the BBC.

The EC has confirmed it is in contact with UK authorities after the Japanese firm announced it was to build two new models in the Sunderland. Nissan had received "support and reassurances" from the government about the UK's future outside the EU.

Nissan's commitment to its Sunderland car plant, which produces about a third of all the cars made in the UK, was in doubt after June's EU referendum.

The company's chief executive, Carlos Ghosn, had said the government might have to guarantee compensation for costs on any new trade tariffs resulting from the UK leaving the European single market for the company to invest further in Britain.

Business Secretary Greg Clark sent a letter to Ghosn before Nissan announced its new commitment to Sunderland, following meetings between executives and the Prime Minister. Clark has come under increasing pressure to reveal exactly what promises were made.

Last week, Clark said Nissan was told the government would seek tariff-free access to EU markets for the car industry, but that this was merely out of a longstanding negotiating stance.

He declined to publish the full letter he sent to Nissan because it contains commercially sensitive information.

Critics say the pledge amounts to a promise of a bespoke deal, which raises the spectre of other companies seeking similar arrangements. Labour warns this could cost the taxpayer billions of pounds.

Until Britain leaves the EU, "it is still bound by the trading bloc's rules", says the Daily Telegraph, meaning it will not be able to favour particular companies or provide financial assistance that is not being offered to competitors.

Does Nissan Brexit pledge open door to single market?

31 October

The government's pledge to carmaker Nissan has given renewed hope to those pressing for the UK to remain in the single market post-Brexit.

Last week, the carmaker announced it will build the new models of its Qashqui and X-Trail models at its plant in Sunderland, potentially adding hundreds of new jobs to the 7,000-strong workforce.

However, the announcement only came after Nissan received "support and assurances" over the future of it trade in the UK from the government, prompting speculation that ministers had promised to pay potentially billions of pounds to compensate for any future EU import tariffs.

Business Secretary Greg Clark told the BBC's The Andrew Marr Show yesterday the company had merely been given detail on the government's Brexit negotiating stance.

"I was able to convey what our demeanour would be in those negotiations," he said.

"So what I said is that our objective would be to ensure that we have continued access to the markets in Europe and vice versa without tariffs and without bureaucratic impediments and that is how we will approach those negotiations."

As innocuous as that sounds - and as much as it apparently confirms there was "no cheque book" involved in the deal - it is also a significant admission that the government is prioritising single market access.

It "suggests No 10 is seeking a free trade relationship for the automotive industry that at least brings benefits similar to membership of the single market and customs union", says The Guardian.

The paper adds: "Theresa May has however said she wants greater immigration controls… a combination that Brussels politicians have repeatedly said is unachievable."

Former deputy prime minister Nick Clegg has written to Clark to warn that the pledge could cost the taxpayer "colossal amounts of money" in subsidies if it amounts to "a series of deals for different industry sectors" rather than full membership of the single market.

Keir Starmer, the shadow Brexit secretary, told ITV's Peston on Sunday Nissan "has been told more about [the government's Brexit stance] than we have in parliament".

Ministers have "got to come clean", he said, adding that "other businesses up and down the country of every size and every sort" also needed reassurance.

'No cheque book' in Nissan deal, says Greg Clark

28 October

"There's no cheque book. I don't have a cheque book," Greg Clark told the BBC Question Time audience last night.

The Business Secretary was responding to a question on whether the government had promised financial incentives for Nissan ahead of the Japanese carmaker's pledge to massively invest in its plant in Sunderland.

Two new cars, the next version of the popular Qashqui and the X-Trail SUV, will be built at the UK's largest car factory, taking its total annual output to 600,000 cars and potentially adding hundreds of jobs to the 7,000 workforce.

As recently as late last month, Nissan boss Carlos Ghosn was threatening to pull future investment in the UK unless the government gave assurances it would compensate any costs related to the UK's exit from the EU.

Around 80 per cent of the cars Nissan produces in the UK are shipped to the continent. Under World Trade Organisation (WTO) rules, import tariffs of ten per cent could be added to these sales after brexit.

The Times reports that following meetings between Ghosn and Theresa May, Clark sent the company a letter pledging to ensure UK-based carmakers would "remain competitive".

That "is regarded by Nissan as a promise that it will not have to bear the cost of punitive tariffs on car exports if Britain leaves the EU customs area without a free trade agreement in place", says the newspaper.

Clark, while not denying sending the letter, refutes this claim. The company also rejects suggestions of a special deal.

Colin Lawther, Nissan's senior vice-president for manufacturing in Europe, said: "It's just the commitment… to work with the whole of the automotive industry to make sure that the whole automotive industry in the UK remains competitive."

Sky News's Ian King said it was unlikely any export subsidy has been made as it would be illegal under WTO rules.

Instead, he says, the government could have offered to mitigate costs in other ways, such as "training grants, improving the road connectivity to and from the factory… [or] providing grants to make the plant more environmentally friendly".

Another alternative "is that Mrs May has given Mr Ghosn assurances that Britain will remain in the EU's single market or customs union", he adds.

Nissan to build new models in Sunderland after Downing Street charm offensive

27 October

Whatever Theresa May promised when she met Nissan's boss Carlos Ghosn earlier this month, it appears to have worked.

Late last month, the Japanese giant issued a thinly-veiled threat that it might pull investment from its Sunderland plant as a result of Brexit uncertainty. The company employs 7,000 people and is the largest car-making facility in the UK.

The chief executive then had a meeting with the Prime Minister at Downing Street, after which he said he was "confident the government will continue to ensure the UK remains a competitive place to do business", says The Guardian.

Today, praising the "support and assistance" of the government, Nissan confirmed it will make two new cars at the Wearside plant over the coming years, potentially creating hundreds of new jobs.

Company sources had originally indicated Nissan would decide where to build the next version of its Qashqui series by the end of this year. Today's announcement will see it go into production in Sunderland in either 2018 or 2019. The next version of the X-Trail SUV will also be made at the site.

Business Secretary Greg Clark says Nissan will turn the 7,000-strong factory into a "super-plant, manufacturing over 600,000 cars a year".

The BBC's Russell Hotten says: "We don't know the details of the 'support and assurance' that Nissan extracted from the UK government.

"Will other carmakers with big investment decisions to make now favour Britain? It's possible – but now only after securing a few government guarantees."

Ghosn, speaking at the Paris Motor Show at the beginning of the month, had called for the government to guarantee it would cover the costs of any import tariffs to the EU imposed as a result of its Brexit negotiations.

If his company secures that pledge, then the UK is if anything a more attractive place to do business since the June referendum. Many of the cars the company produces are shipped overseas and the 15 per cent slump in the pound since the vote for Brexit means those exports are more lucrative.

It's a similar story for pharma giant GlaxoSmithKline, which generates 96 per cent of its sales abroad. Yesterday it revealed a post-referendum windfall of almost £1bn, says The Times.