Nissan Europe ‘unsustainable’ in no-deal Brexit

October 10, 2019 by No Comments


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Media captionThe head of Nissan Europe says a no-deal Brexit threatens the firm’s business model

Japanese carmaker Nissan has warned that a no-deal Brexit could make its European business model unsustainable.

Nissan’s European chairman, Gianluca de Ficchy, said if a 10% export tariff was introduced after the UK left the EU it would put its operations “in jeopardy”.

This would be case if the UK moved to World Trade Organization (WTO) rules after Brexit, he said.

He was speaking at Nissan’s plant in Sunderland, where work on a new model of the Juke is due to start.

The Japanese firm said it had invested £100m in the plant, which also makes the Qashqai and electric Leaf models.

Mr de Ficchy said Nissan still intended to build in Sunderland, the UK’s biggest car plant, but that it was difficult to plan for the future amid Brexit uncertainty.

The new Juke has been designed and manufactured in the UK, aimed specifically at European markets, with two-thirds of its components coming from the EU and 70% of production destined for the continent.

Nissan, which employs 7,000 in Sunderland, also has operations in Spain.

Mr de Ficchy said the cost of moving to WTO rules would mean the “entire business model for Nissan Europe will be in jeopardy”.

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Mr de Ficchy said if duties were applied after a no-deal Brexit it would “create an enormous problem”

The car industry is the UK’s biggest exporter of goods and eight out of every 10 cars built in the UK are exported.

Speaking to the BBC, Mr de Ficchy said: “We do not know still what a no-deal means.

“There are many alternatives, and today there is a lot of uncertainty.

“The only message I can [give] is that if a no-deal will be associated with the application of 10% duties under the WTO rules, that will create an enormous problem for the overall European activities of Nissan Europe.

“If we will have to sustain 10% export duties on the vehicles that we export from UK to EU, knowing that those vehicles represent 70% of total production, the overall business model won’t be sustainable.

“It’s not a question of Sunderland, it’s a question of the overall economic sustainability of our business [in Europe].”

He said the business was asking for tariffs not be imposed if there is a no-deal Brexit.

“We are asking not to have tariffs being applied in a no-deal scenario because otherwise the tariffs won’t be sustainable for us,” he said.

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On Wednesday, union leaders revealed night shifts at Sunderland would end – but Mr Ficchy said this was not the result of Brexit.

Other carmakers have warned about the impact of Brexit on their business, not just because of the cost of tariffs but the potential slowdown in production caused by new customs checks after the UK leaves the EU.

The industry operates a “just-in-time” model, shifting parts around the EU to construct cars in plants across the 28-nation bloc.

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Last month, Carlos Tavares, chief executive of PSAthe car group that owns Vauxhall – compared a no-deal Brexit to a head-on train crash.

He has warned previously that Vauxhall plants at Ellesmere Port and Luton were under threat from Brexit.

In June, PSA Group announced plans to build a new version of the Vauxhall Astra at its Ellesmere Port factory in Cheshire.

The industry is also under pressure with fewer diesel cars being bought and emissions standards presenting challenges for carmakers.

In February, Honda announced the closure of its Swindon plant but said it was nothing to do Brexit.

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Nissan employs 7,000 people at its plant in Sunderland