United Kingdom offered Nissan $100 million to ease its Brexit fears

06 February, 2019, 10:39 | Author: Sherry Houston
  • The failure of Britain's government so far to negotiate a smooth exit plan from the European Union has made car manufacturers less willing to use Britain as a European manufacturing centre

The Department for Business, Energy and Industrial Strategy was prepared to offer Japanese vehicle manufacturer Nissan £80m of support to build its new X-Trail model at the firm's Sunderland plant, it has been revealed.

Business Secretary Greg Clark says in 2016 Nissan were awarded £61m over nine years as an investment for training, environmental improvements, and research and development.

Part of the Government's package of funding is understood to have been intended for upskilling of the Sunderland workforce ahead of production of the new Qashqai at the plant and Nissan is said to be continuing in its plans to build that vehicle in the North East.

But the company said Sunday the X-Trail for the European market will be produced in its Kyushu plant in Fukuoka Prefecture, southwestern Japan, citing "the continued uncertainty around the U.K.'s future relationship with the EU".

Many Japanese companies had long seen Britain as the gateway into Europe, after being encouraged to open factories in the country by former prime minister Margaret Thatcher but Brexit has thrown that into doubt, prompting consternation in Tokyo.

Whist the company claims that existing production and the nearly 7000 jobs at the plant are safe, the decision to cancel X-trail production at the site - which was expected to create hundreds of new jobs - has caused a great deal of concern.

Britain is scheduled to leave the European Union on March 29, but United Kingdom politicians are divided over Prime Minister Theresa May's Brexit plan.

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Nissan had announced its plan to build new SUV models at the Sunderland plant about a week after Clark's letter was sent.

The sprawling facility, producing cars destined for the European continent, is also seeing weak demand for high-polluting diesel cars - which face tighter regulation worldwide. Supply chains would be snarled and shipments could be delayed at the border.

"What we are doing right now is working at home on the proposal we will take to Brussels", he said.

Nissan is also expected to benefit from building these cars in Japan and exporting them to Europe since the two sides recently ushered in a landmark free trade deal.

Nissan's Sunderland factory builds the Juke, Qashqai and eco-friendly Leaf models.

German Chancellor Angela Merkel also said the agreement couldn't be renegotiated, although questions surrounding border arrangements could be addressed in a declaration on the future relationship between the European Union and Britain.

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