Brexit: Nissan warns UK factory ‘will not be sustainable’ without EU trade deal

Tariffs on exports to the EU would force car maker to move production elsewhere, says

Japanese car manufacturer says tariffs will make its UK business unsustainable (Getty Images)

The UK's biggest car plant will not be sustainable unless a trade deal is agreed with the EU, Nissan has warned. The Japanese car maker employs around 7,000 people at its Sunderland factory where it has built more than 10 million cars since 1986.

Nissan has repeatedly stressed that production in the UK is under threat without tariff-free access to the EU.

With just days left for negotiators to agree trade terms that will apply from 1 January, Nissan's chief operating officer Ashwani Gupta issued his most emphatic warning yet. 

"If it happens without any sustainable business case obviously it is not a question of Sunderland or not Sunderland, obviously our UK business will not be sustainable, that's it," he told Reuters on Monday.

"Having said that, if we are not getting the current tariffs, it's not our intention but the business will not be sustainable. That's what everybody has to understand."

Nissan's Sunderland factory is considered to be one of Europe's most advanced and productive car plants and a key part of the region's economy, supporting thousands of jobs in the supply chain.

A new hybrid model of Nissan's Qashqai is scheduled to be built there next year alongside Juke and LEAF models which are already rolling off production lines.

That future is in doubt as the UK’s Brexit negotiating team, led by Lord David Frost, attempt to reach a deal in Brussels this week.

Britain and the EU are stretching a mid-November deadline to conclude talks, which both sides said was the last moment a free trade agreement could be signed in time for the end of the year.

Asked about Nissan’s comments, the prime minister’s official spokesperson said: “We continue to work as we have done throughout the negotiations this year to try to reach a free trade agreement based on zero tariffs and zero quotas. That continues to be our aim.

“That is why David Frost and his team are in Brussels this week trying to secure that.”

Nissan’s Sunderland factory has frequently been at the centre of Brexit controversy. Former Nissan boss Carlos Ghosn warned back in 2016 that the company’s future in the UK could not be guaranteed because of tariffs that might be imposed.

Theresa May’s government offered assurances to Nissan in order to keep the plant open but repeatedly refused to publish details of what promises were made. It was later revealed that the sweeteners included up to £80m of support for skills, training, research and development and training – as long as Nissan built its new Qashqai and X-Trail models in Britain. The company eventually decided to build the X-Trail in Japan.

Despite concerns over the uncertainty of Britain’s trading relationship with the EU, Nissan said in March that it would go ahead with a £400m investment at the Sunderland site. Less than two weeks later, production was suspended after coronavirus prompted a drop in demand and caused difficulty importing parts from Japan.