Is Brexit to blame for Nissan withdrawal?

Remain supporters have claimed that Brexit is to blame for Nissan’s decision to cancel plans which would have seen the Japanese car giant manufacture one of its flagship vehicles in Sunderland.

The compant confirmed yesterday it would instead be moving production of its X-Trail model to Japan.

In a letter to workers, Nissan’s Europe division boss Gianluca de Ficchy said the announcement would be “interpreted by a lot of people as a decision related to Brexit” and that acknowledged that “uncertainty around the UK’s future relationship with the EU is not helping companies like ours to plan for the future”.

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Nissan employs roughly 7,000 people at its plant in Sunderland, an area where 61.3% voted to leave the EU. In late 2016, the company gave the government what appeared to be a symbolic and much-needed post-referendum vote of confidence by pledging to manufacture its new SUV model at the site

At the time there were questions raised about what reassurances had been given by the government in exchange for the commitment. Although the details of a letter sent by Business Secretary Greg Clark remain confidential, the Financial Times claims that “the government pledged to use supply chain investment, workforce spending and tax breaks for electric vehicle technology to help the carmaker offset any negative impacts from the UK’s departure from the EU”.

Liberal Democrat leader Sir Vince Cable said Nissan’s withdrawal could be a turning point in Brexit uncertainty, showing that big companies were “very seriously reconsidering their future here”.

“The whole industry is rethinking its approach because it originally saw Britain as a gateway to Europe and that gateway is now closing,” he said.

The Labour MP for Sunderland, Julie Elliot, said she would ask the government to intervene to protect jobs in the city.

“But we cannot deny the inevitable role that Brexit plays,” she said. “The constant uncertainty, the chaotic government. None of it is conducive to encouraging business investment in this country.”

Sky News, who broke the story, reports that “as of Sunday morning pro-Brexit MPs remained largely silent regarding the news”.

Less than eight weeks before the UK is set to leave the EU, the decision by Nissan “casts further gloom over the embattled car industry about a no-deal Brexit”, says The Sunday Times.

The BBC reports that “a number of carmakers, including Jaguar Land Rover, Toyota and Vauxhall, have expressed fears of disruption to their supply chains in the event of a no-deal Brexit”, which would see EU imports and exports face tariffs and border checks.

The Society of Motor Manufacturers and Traders (SMMT), which represents the sector, has warned that such a situation would be catastrophic for UK car manufacturing.

Last week the SMMT revealed that new investment announcements in the automative sector had fallen by 90% in the last five years.