Nissan Confronts Post-Brexit Reality With SUV Plant Decision

(Bloomberg) -- Nissan Motor Co., the U.K.’s top auto producer, will decide next month whether to continue producing one of its best-selling vehicles in the country preparing to leave the European Union.

The Japanese automaker is determining whether to build the next-generation Qashqai sport utility vehicle from the Sunderland plant, which employs about 6,700 people, Chief Executive Officer Carlos Ghosn told Ma Jie in an interview with Bloomberg Television. The factory’s competitiveness needs to be protected regardless of Brexit-related discussions, he added.

“We’re at the eve of a sourcing decision,” Ghosn, 62, said Friday from Nissan’s headquarters in Yokohama, Japan. “If you don’t take care of your competitiveness, one day or the other you lose your sourcing.”

Nissan met with Prime Minister Theresa May last week after having called on the U.K. to compensate the company for any negative consequences resulting from Brexit as a condition for new investment in the country. Nissan built one in three of the vehicles the U.K. produced last year and exports more than half of them to Europe, exposing Japan’s second-largest automaker to risks.

While exporters including Nissan have benefited from the pound’s fall since the June referendum, May has indicated favor for a so-called hard Brexit, gaining greater control over immigration but losing membership in the single market. That’s raised concerns U.K. exports might face tariffs in the EU.

“We and the British government understand each other,” Ghosn said. “The future of Sunderland lies in the competitiveness of Sunderland. We have sent a clear message on that and there’s no confusion about that.”

About 61 percent of votes cast from Sunderland during the June referendum favored leaving the EU.

To contact the reporter on this story: Ma Jie in Tokyo at jma124@bloomberg.net. To contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, Simon Kennedy