Nissan hails deal as boost to UK

Car giant Nissan, which previously warned that Brexit risked the viability of its huge Sunderland plant, said on Friday that the last-minute deal struck on Christmas Eve between London and Brussels had now given the company a "competitive edge" internationally.

David Sapsted

22 January 2021

The company not only committed itself to the future of the Sunderland factory - the UK's largest car plant, employing 6,000 people directly and supporting almost 70,000 others in the supply change - but also announced battery production for its new, electric Leaf model would be switched to Britain from Japan.Speaking at Nissan’s Yokohama headquarters, Ashwani Gupta, the company's chief operating officer, said: “Brexit gives us the competitive advantage not only within the United Kingdom but outside the United Kingdom also."Sunderland is one of the top three plants in the world for competitiveness for Nissan. As long as the current business conditions are kept, we are sustainable, not only in Sunderland, but across Europe.” The company's announcement was welcomed by Prime Minister Boris Johnson, who described it as "a great vote of confidence in the UK and fantastic news for the brilliant Nissan workforce in Sunderland and electric vehicle manufacturing in this country".Business Secretary Kwasi Kwarteng added that Nissan's decision represented "a genuine belief in Britain and a huge vote of confidence in our economy thanks to the vital certainty that our trade deal with the EU has given the auto sector".While many British companies have complained about the added layer of customs bureaucracy and costs that the Brexit deal has brought, Mr Gupta dismissed the additional costs as “peanuts” compared to the effects of the Covid-19. On the new layers of red tape, he said: “For a global manufacturer who is running 150 markets and 14 plants around the world, to have additional documentation, to fill in a form at the border, is nothing."An agreement in the Brexit deal states that, from 2027, all UK and European carmakers will have to source batteries from either Britain or the EU, or face tariffs on their exports. Nissan's decision to switch Leaf battery production to the UK means it will avoid such tariffs."We've decided to localise the manufacture of the 62kWh battery in Sunderland so that all our products qualify [for tariff-free exports to the EU]. We are committed to Sunderland for the long term under the business conditions that have been agreed," said Mr Gupta.Additionally, the company announced it would press ahead with the production of a new version of its Qashqai SUV this year, after it delayed introduction of the model because of the dramatic, global slump in car sales because of the pandemic.According to a report in the Financial Times, Nissan could also bring production of new models, such as the X-Trail and Ariya EV, to Sunderland.Meanwhile, the Society of Motor Manufacturers and Traders and companies such as Vauxhall are continuing to urge the government to do more to support car battery manufacturing in the UK.David Bailey, professor of business economics at Birmingham Business School, told the BBC: "This is obviously good news and will help the Nissan Leaf avoid any future tariffs, but we are going to need to see a lot more investment in battery production in the UK if we are to preserve the UK as a car manufacturer and exporter."