Moving production: Nissan sends Brexit shockwaves through United Kingdom auto sector

Nissan cancel X Trail SUV manufacturing plan in UK ahead of Brexit deadline

The current government framework agreement envisages leaving the Single Market and the Customs Union., Nissan's former CEO Carlos Ghosn hinted that he would seek compensation if vehicle exports to Europe were subject to tariffs. He said that of the £61 million worth of grants which had already been approved, only £2.6 million had so far been paid to Nissan.

"We will set our ambitions high and vigorously pursue continued access to the European market as an objective in future negotiations", Clark pledged in the letter.

Many remain MPs have said that Brexit uncertainty is to blame for Nissan withdrawing from plans to manufacture its X-Trail model in the UK.

The vehicle company recently cancelled its plans to manufacture the new X-Trail SUV at its Sunderland plant (as well as at the Kyushu plant in Japan).

"Therefore the company has chose to optimise its investments in Europe by consolidating X-Trail production in Kyushu".

Ficchy said Brexit uncertainty had played a part in the decision, added that "We have taken this decision for the business reasons I've explained, but clearly the uncertainty around the UK's future relationship with the European Union is not helping companies like ours to plan for the future".

The Japanese company employs 7,000 people in the United Kingdom and the 442,000 cars produced at Sunderland a year ago represented almost 30 per cent of the entire country's production.

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It is another sign of the decline of British automotive manufacturing, on which Fleet Europe reported last week.

However, today, Nissan's Europe division boss wrote to Sunderland factory staff confirming the news and telling them that the model will continue to be made in Japan.

But speaking alongside Japanese Prime Minister Shinzo Abe in Tokyo, she said: "We want to do everything to avoid a no-deal, because that would increase the uncertainty".

The timing of the announcement comes just two days after an EU-Japan free trade agreement kicked in, which includes the European Union's commitment to removing tariffs of 10 percent on imported Japanese cars.

Other future models planned for the Sunderland plant - the Juke and Qashqai - are unaffected.

Investment for emissions regulations, reduced sales forecasts and Brexit uncertainty were cited as reasons for the decision. In a bid to perform damage limitation, the government has insisted that Nissan's decision will not result in any job losses at the plant (but this is unsurprising as it is a planned expansion that has been cancelled).

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