Car manufacturer Nissan has confirmed its new X-Trail model, which was originally planned to be made at its Sunderland factory, will instead be produced in Japan.
Nissan sent a letter to workers on Sunday in which it said ongoing uncertainty around Brexit is hindering the company’s “plan for the future”.
The Japanese firm announced in 2016 it would make the new X-Trail cars in the North East after being given “assurances” from the UK government.
Since Nissan’s decision was made public, the government said it was “a blow to the sector”, but said no jobs would be going as a result, according to the BBC.
Nissan has made cars in Sunderland since 1986 and employs around 7,000 people there. The company’s U-turn has sparked widespread debate between Remain and Leave campaigners.
Prominent Brexit supporters Julia Hartley-Brewer and Jacob Rees-Mogg both dismissed Brexit’s role in Nissan’s change of heart.
“Nissan is not moving its production of an unwanted car to the UK because we don’t want to buy them here. That’s all there is to it. You can’t blame Brexit for everything,” said Ms Hartley-Brewer on TalkRadio this morning.
Julia: "Nissan is not moving its production of an unwanted car to the UK because we don't want to buy them here. That's all there is to it. You can't blame Brexit for everything"@JuliaHB1 | https://t.co/sv3MZUm41c pic.twitter.com/CDcBPMXMy3— talkRADIO (@talkRADIO) February 4, 2019
‘Demand has fallen’
Rees-Mogg also used his radio slot, on LBC, to talk about Nissan: “This is because demand has fallen. It’s a lower level of demand, which makes it a different decision. It’s based on different business facts, not on Brexit, which is what the company itself has said.”
The Tory MP was responding to a caller called Terry, who had said: “It’s turned into Project Fact, not Project Fear, isn’t it?
“They did agree to build this X-trail in Sunderland, but now they’ve changed the decision to build it in Japan, given that Japan has a nice new trade deal with the EU. It makes business sense to build it in Japan, not the UK, as business investment has gone down in the UK this year, by half a percent.”
Sunderland MP Bridget Phillipson said Brexit has clearly had an impact: “This isn’t just about Brexit, although it’s very clear that Brexit uncertainty is a major issue for the automotive sector across our country, and has already caused serious harm.”
But she added that “snide remarks” about Sunderland, a strong Leave area in the 2016 referendum, are unhelpful and “insulting.”
I'm a remainer with family in law & friends that voted brexit, live in Sunderland & work at Nissan.— ?????? (@pickledpuffin) February 3, 2019
I'm gutted they fell for lies. I'd expect rage, protesting, writing to MPs. What's really happening?
They're blaming the EU, the deal, anything but leading leavers. Unbelievable! https://t.co/Sg5wyRBZT9
Unions have said they are “seriously concerned” about the ramifications and called the news “disappointing” on Monday.
So is it down to Brexit or not?
The short answer is that it’s likely down to a number of things, but there’s no doubt Brexit has been significant.
Nissan Europe chairman Gianluca de Ficchy said in a statement on Sunday: “We appreciate this will be disappointing for our UK team and partners.
“While we have taken this decision for business reasons, the continued uncertainty around the U.K.’s future relationship with the EU is not helping companies like ours to plan for the future.”
But Nissan has also commented that “the environment for the car industry in Europe has changed dramatically”.
Falling diesel sales are definitely a factor here. The market for diesel run vehicles in Europe has decreased since 2016, partly down to the Volkswagen emissions scandal.
Consumers are now less likely to opt for the fuel type as they are worried about additional costs and tougher rules. Sales of new diesel cars in the UK fell by 30 per cent in 2018, the Society of Motor Manufactures and Traders said.
Nissan was going to make the diesel model of its X-Trail in Sunderland.