Nissan confirms UK investment U-turn, citing Brexit

Nissan confirmed on 3 February it has reversed plans to invest in new manufacturing capacity in the UK, citing “continuing uncertainty” around Brexit. The carmaker said it was canceling a plan to build a new version of its X-Trail model at its plant in Sunderland and would instead produce the cars in Japan.

The carmaker set out the plan in October 2016, four months after the Brexit referendum, after receiving “assurances” from the UK government.

“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,” Nissan’s statement read. It said its intention to manufacture other new models in Sunderland were not affected.

Word of Nissan's decision immediately spurred renewed questioning and criticism of the handling of Brexit by Prime Minister Theresa May and her government. “It does raise fundamental questions about the Brexit strategy,” opposition Liberal Democrats leader Vince Cable told Sky’s Sophy Ridge on Sunday show. “Brexit is clearly a major factor, it may be one of several but [it is] certainly a major factor.”

No job losses were expected as a result of Nissan's change in plans, but it raises questions about the future of the British manufacturing site. Nissan employs an estimated 7,000 people in Sunderland. “We appreciate this will be disappointing for our UK team and partners. Our workforce in Sunderland has our full confidence, and will continue to benefit from the investment planned for [other models] Juke and Qashqai,” Nissan said.

UK Business Secretary Greg Clark said the announcement was “a blow to the sector and the region,” but said the company had “reiterated today their commitment to the UK by continuing to manufacture [new models] in Sunderland.”

The UK car industry this week reported a five-year low in production figures and a 46.5% drop in inward investment last year. “With fewer than 60 days before we leave the EU and the risk of crashing out without a deal looking increasingly real, UK automotive is on red alert,” said the UK Society of Motor Manufacturers and Traders Chief Executive Mike Hawes.

“This represents a serious blow to the communities that depend on the jobs Nissan creates and supports,” Labour's Shadow Brexit Secretary Keir Starmer tweeted. “The Tories’ chaotic handling of the Brexit negotiations is having a devastating impact on business investment.”

Britain’s largest carmaker Jaguar Land Rover said in January it would cut 4,500 jobs, most of those from its UK workforce.