Japanese car-maker Nissan is set to abandon plans to build its X-Trail model at its Sunderland plant, reports say.
Company executives are expected to cancel plans to build the new SUV on Monday – less than eight weeks before Britain is scheduled to leave the EU.
But Nissan has refused to shed any light on the situation, saying it ‘does not comment on rumour or speculation’.
The firm had voiced concerns about Brexit before committing to build the new Qashqai and X-Trail models in its North East factory in October 2016.
Japanese car-maker Nissan is set to abandon plans to build its X-Trail model at its Sunderland plant, reports say
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.
But the move also prompted a series of questions over whether a ‘sweetheart deal’ between the car-maker and the Government had been struck to protect the manufacturer from any post-Brexit EU tariff wall.
Ministers strongly denied any financial incentives were offered and Chancellor Philip Hammond said any costs arising from the assurances would be small enough to be covered within the Department for Business’s spending limits.
The Sunderland plant, which has been active since 1986, employs almost 7,000 people and produces around 2,000 cars a day.
But Nissan has refused to shed any light on the situation, saying it ‘does not comment on rumour or speculation’ (Pictured, a worker assembles the Infiniti Q30 automobile)
The decision to build its next-generation Qashqai and add production of the new X-Trail model at the site had eased concerns about the future of the factory
But according to Sky News, Nissan’s impending announcement is not expected to have a major impact on jobs.
Labour MP for Houghton and Sunderland South, Bridget Phillipson, said the potential abandonment of the project is ‘deeply troubling news’.
She said: ‘If confirmed, this would represent deeply troubling news for the north east economy.
‘So many jobs and livelihoods depend on Nissan’s success.’
Sunderland Central MP Julie Elliott said ‘the downturn in the diesel market is what is being blamed’ for the decision.
Nissan’s decision is not expected to have a major impact on the plant’s 7,000 employees
‘I will be doing everything I can to protect the jobs at the Sunderland plant. I will be asking for the government to intervene, and will stay in close contact with the company itself,’ she said.
‘But we cannot deny the inevitable role that Brexit plays here. The constant uncertainty, the chaotic government. None of it is conductive to encouraging business investment in this country.’
Nissan is part-owned by French manufacturer Renault, which had led to concerns that production could be moved to France to avoid any tariffs which might be introduced on exports to the EU if the UK leaves the single market in a hard Brexit.
Other models built at the Sunderland plant include the Qashqai, Juke, Q30, Note and the zero-emission electric Leaf.
Labour MP for Houghton and Sunderland South, Bridget Phillipson, has now said the potential abandonment of the project is ‘deeply troubling news’
The U-turn comes as figures show car production slumped by almost a tenth last year, leaving the industry on ‘red alert’ amid continued Brexit uncertainty.
A report by the Society of Motor Manufacturers and Traders (SMMT) said investment had effectively ‘stalled’ amidst fears over the UK’s future trading with the EU.
Just over 1.5 million cars left UK factories in 2018, a 9.1 per cent decline on the previous year and the lowest for six years.
Production of diesel cars was down by 22 per cent to 561,000 last year.
SMMT chief executive Mike Hawes said the fall in investment was ‘deeply depressing’ and should send a strong signal to politicians to secure a Brexit trade deal.
The reported decision by Nissan also comes just weeks after a triple jobs blow in the UK car industry.
The reported decision by Nissan comes just weeks after a triple jobs blow in the UK car industry
Earlier this month American car manufacturer Ford confirmed nearly 400 jobs would be lost at its engine manufacturing plant in Bridgend.
The company said the ‘voluntary separation programme’ at the Welsh factory is needed to cut costs and create a ‘sustainably profitable business’ in Europe.
It followed a similar move by Jaguar Land Rover to reduce its 44,000 workforce by 4,500 under plans to make £2.5 billion of cost savings.
Most of the cuts will be in the UK, with a voluntary programme being launched, and are in addition to 1,500 workers who left the company last year.
Japanese firm Honda also announced six non-production days in April under contingency plans to mitigate the risk of disruption to production at its Swindon factory after the UK leaves the EU.