Japan's Nissan to cancel plans of X-Trail model in UK

Jason Cook

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Nissan has made cars in Sunderland since 1986 and employs around 7,000 people there.

Nissan Motor Co. on Sunday confirmed the automaker will move production of the new X-Trail SUV planned for a plant in Britain instead to Japan, citing continued Brexit uncertainty.

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The news was due to be announced today, but Nissan was pushed to admit it early by the swirling rumours and panic over the weekend. With the collapse in diesel sales there are doubts about the volume of exports Nissan will achieve, but the existence of this trade deal does present the United Kingdom with a challenge.

Nissan said it took the decision on the X-Trail for business reasons, with continued uncertainty surrounding future United Kingdom.

Nissan had pledged to manufacture the new SUV model in the United Kingdom four months after the referendum - a move seen as a major vote of confidence in the country's manufacturing outside the EU.

The Society of Motor Manufacturers and Traders said in June that investment in new models, equipment and facilities in the United Kingdom was $A625 million in the first half of the year, compared to $A1.1 billion in the same period of 2017 - a decrease of about half.

Nissan executive vice president for manufacturing and supply chain management, Hideyuki Sakamoto, also commented: "A model like X-Trail is manufactured in multiple locations globally, and can therefore be re-evaluated based on changes to the business environment".

"Therefore the company has made a decision to optimize its investments in Europe by consolidating X-Trail production in Kyushu".

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Nissan was meeting representatives from Britain's biggest union, Unite, on Monday.

On Feb. 1, an EU-Japan free trade agreement also kicked in, which includes the EU's commitment to removing tariffs of 10 percent on imported Japanese cars, diminishing part of the business case for building in Europe.

Nissan, which builds 30 percent of Britain's 1.52 million cars at its factory, the country's biggest auto plant, exports the vast majority of the vehicles to European Union countries and, like the rest of the industry, is anxious about tariffs if there is a no-deal Brexit.

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Production of the Leaf EV reached just under 47,000 a year ago, up around 180% from 2017.

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Earlier this month American vehicle manufacturer Ford confirmed almost 400 jobs would be lost at its engine manufacturing plant in Bridgend.

The Nissan (7201.T) announcement comes less than a month after Jaguar Land Rover and Ford (F) announced thousands of job cuts at United Kingdom factories. The X-Trail production plans had been announced in the autumn of 2016.

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