Japan's Nissan abandons plans to build X-Trail model in UK

Katie Ramirez
February 7, 2019

The vehicle giant announced in 2016 that it planned to build its X-Trail model in Sunderland, but will now assemble it instead at Nissan's global production hub in Kyushu, Japan.

But questions remain about Brexit's impact on the decision. At the time, the government would not reveal what it had said in a letter to Nissan, but denied that financial incentives had been offered. Addressing to an initial abandoning of X-Trail productions in Britain less than two months before a chaotic Brexit, the Sky report stated, "Precise details of Nissan's impending announcement were unclear this weekend, but sources said it was likely to initially involve abandoning the X-Trail production plans which had been announced in the autumn of 2016".

"We will set our ambitions high and vigorously pursue continued access to the European market as an objective in future negotiations".

The letter was leaked after Nissan revealed that it was breaking its pledge to build the X-Trail SUV in the United Kingdom and switching production to Japan. The secretary told parliament Monday that as a result an offer of grants totaling 61 million pounds was made on June 21, 2018, and of them, 2.6 million pounds has already been paid.

"The continued uncertainty around the UK's future relationship with the EU is not helping companies like ours to plan for the future", Nissan's European chairman Gianluca de Ficchy said. Nissan's executive vice president for manufacturing and supply change management, Hideyuki Sakamoto, pointed out that: "A model like X-Trail is manufactured in multiple locations globally and can therefore be re-evaluated based on changes to the business environment".

However, earlier this week it confirmed a decision to move production to Japan.

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Many Japanese companies had long seen Britain as the gateway into Europe, after being encouraged to open factories in the country by former prime minister Margaret Thatcher but Brexit has thrown that into doubt, prompting consternation in Tokyo.

"In any circumstance, the government will ensure that the United Kingdom continues to be one of the most competitive locations for automotive and other advanced manufacturing within Europe and globally, including sites such as Sunderland".

Unite Union representatives are due to meet with Nissan bosses on Monday to discuss the situation.

The company said planned investment in the next-generation Juke and Qashqai, also announced in 2016, was unaffected.

The Prime Minister of the United Kingdom, Theresa May, expressed on Tuesday her commitment to Northern Ireland in favour of its plan to withdraw from the European Union (EU), a process known as Brexit.

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