Nissan Warns U.K. Plant Unviable If Brexit Triggers Tariffs
Nissan Warns U.K. Plant Unviable If Brexit Triggers Tariffs
Nissan Motor Co. issued its starkest warning yet against a no-deal Brexit, saying any tariffs on auto exports to the European Union are likely to render its U.K. operations unviable.
The imposition of World Trade Organization rules with a 10% duty on U.K.-built cars shipped to the EU would be impossible to offset through cost cuts, Nissan Europe Chairman Gianluca de Ficchy said Thursday at the company’s Sunderland factory in northeast England.
While it is impossible to say how disruptive a hard Brexit would be, the impact of tariffs is more certain and would put the future of Britain’s biggest auto plant in doubt, De Ficchy said.
“The only clear conclusion we have reached is that if there were to be a no-deal Brexit with the imposition of WTO tariffs, it will not be sustainable,” he said. “That will represent a significant cost increase which would make our products less competitive.”
De Ficchy said there’d be no knee-jerk reaction to Brexit and that assessing the future of a plant, which sends 70% of its output to the EU, is not a straightforward process. He added that Nissan still believes Sunderland -- which directly employs 6,500 people -- has strong assets.
Carmakers have been increasingly vocal in opposing a British split from the European Union without a deal, warning of a devastating impact on the industry. Nissan has scrapped plans to build its X-Trail sport utility vehicle in Sunderland and ended production of the luxury Infiniti brand there.
Qashqai Question
Production of the larger Qashqai SUV could be moved to Spain, though De Ficchy said the company is currently assuming a next-generation version will remain in the U.K.
The executive was speaking after unveiling a revamped assembly line for the updated Juke crossover auto, which will be built in Sunderland from Monday. The introduction of the model will mean the loss of one of five daily work shifts as staff transfer between the site’s two assembly lines, though employment levels won’t be affected.
De Ficchy said output at the plant will fall 20% to 360,000 autos in the year through March as a result of already announced production changes prompted by slowing diesel demand and sluggish sales in Turkey.
To contact the reporter on this story: Siddharth Philip in Sunderland, England at sphilip3@bloomberg.net
To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Christopher Jasper, John Bowker
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