Nissan cancels investment plan for United Kingdom plant

Nissan cancels investment plan for United Kingdom plant

Nissan cancels investment plan for United Kingdom plant

Over the weekend Nissan said it would no longer manufacture the new model X-Trail SUV in Sunderland, stopping a planned expansion. However, things have changed since then.

The company said it will produce it exclusively in Japan, warning two months before Brexit that uncertainty over Britain's departure was making it harder to plan for the future.

"While we have taken this decision for business reasons, the continued uncertainty around the U.K.'s future relationship with the European Union is not helping companies like ours to plan for the future".

The X-Trail model was previously planned for production in the announced in 2016 after the company and United Kingdom government worked out an agreement for future investment.

Its decision to produce the next-generation Qashqai and the new X-Trail model at the site had eased concerns about the future of the factory.

Sunday's announcement also came as the carmaker continues to deal with the fallout from the arrest of its former boss Carlos Ghosn, which has clouded the outlook for the car-making alliance between Nissan, Renault and Mitsubishi.

Less than two months before Britain's scheduled withdrawal date, the government doesn't have an approved agreement on the rules, conditions and terms that will replace the 45 years of frictionless trade that came with being an European Union member. "Our workforce in Sunderland has our full confidence, and will continue to benefit from the investment planned for Juke and Qashqai".

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May's government had previously gone out on a limb to safeguard Nissan's investment in the United Kingdom, offering private assurances to the company.

Nissan builds roughly 30% of the UK's 1.52 million cars and exports the vast majority to the continent.

"The plan has always been to leave, as we always said, without a deal if we can not agree on a deal, and that is why it was so important that we did all the planning and preparations around it", she responded.

Nissan, which has made cars at Sunderland since 1986, said plummeting diesel auto sales were also a factor in its decision, which was expected to have created an additional 700 jobs at Sunderland.

And Sharon Hodgson, the area's Labour MP, said: "This is a great loss of future investment in Sunderland and I am sure that people will share my huge disappointment and concern at this news".

"It's why when I return to Brussels I will be battling for Britain and Northern Ireland, I will be armed with a fresh mandate, new ideas and a renewed determination to agree a pragmatic solution that delivers the Brexit the British people voted for, while ensuring there is no hard border between Northern Ireland and the Republic of Ireland", she added.

The announcement comes just days after a free-trade agreement between Europe and Japan came into force, removing the previous 10 per cent import tariff imposed on Japanese cars in Europe.

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