Nissan to start making new Juke car at UK plant as Brexit looms

Nissan said it would begin making the next-generation Juke vehicle at Britain’s biggest car plant on Monday, just over two weeks before a possible no-deal Brexit which the industry has warned could bring production to a halt.

Nissan decided in 2015, before the 2016 referendum was even held, to make the latest version of the sport utility vehicle at its northern English Sunderland factory, reflecting how major decisions are made years in advance.

The Japanese company, which was encouraged by Prime Minister Margaret Thatcher in the 1980s to use Britain as a gateway to the Continent, has spent 100 million pounds on the latest investment in Juke with 70% of the output for EU markets.

“Thirty-five years ago Nissan decided to create a plant in the UK to serve our European markets,” said Nissan’s Europe Chairman Gianluca de Ficchy on Thursday.

“The new Juke represents a further 100 million pound investment in our Sunderland plant and is designed, engineered and manufactured in the UK for European customers,” he added.

The factory is also due to build the new Qashqai model from next year but the firm has previously said it could review that 2016 decision especially if there is a change to “free trade agreements.” Nissan’s then Europe manufacturing boss Colin Lawther told lawmakers in 2017: “As those circumstances change - and we will not wait until the end of the process - we will continually review the decisions that we take based on anything that materially changes.”

Prime Minister Boris Johnson has said he is prepared to take Britain out of the European Union without an agreement but is seeking a deal with the bloc, although time is running out to secure an orderly departure before the Oct. 31 deadline.

The car industry fears that a no-deal Brexit will add tariffs on vehicles, engines and components as well as introduce customs delays which could rapidly stop production and risk the long-term viability of British sites.

Ministers have said they are prepared for a no-deal outcome and could help affected sectors. Brexiteers have long argued that Europe’s biggest economy, Germany, which exports hundreds of thousands of cars to Britain each year, would protect that trade.

Nissan is ending the night shift at the Sunderland plant and the overall headcount of staff will be a little lower at around 6,000 as it focuses on ramping up the new vehicle.

No-deal Brexit tariffs of 10% on vehicles would be unsustainable for Nissan in Europe, where it runs Britain’s biggest car factory, the Japanese company warned on Thursday.

The automaker made nearly one in three of Britain’s 1.5 million cars last year at its northern English Sunderland plant, although annual production levels at the site will drop this year.

Nissan, which was encouraged by then Prime Minister Margaret Thatcher in the 1980s to use Britain as a gateway to the Continent, has spent 100 million pounds on investment in a new Juke model, due to begin production next week.

But the autos sector, Britain’s biggest exporter of goods, is concerned that World Trade Organisation tariffs of 10% on vehicles alongside new customs checks and delays could halt production if there is a disorderly Brexit on Oct.31.

“If we are in a situation in which tomorrow we will have to apply 10% export duties to 70% of our production, the entire business model of Nissan in Europe will be in jeopardy,” the firm’s European Chairman Gianluca de Ficchy told reporters.

“If there will be a no-deal - and a no-deal will be associated with WTO tariffs application - that won’t be sustainable for us,” he added.

Prime Minister Boris Johnson has said he is prepared to take Britain out of the European Union without an agreement but is seeking a deal with the bloc, although time is running out to secure an orderly departure before the deadline in three weeks.

Ministers have said they are prepared for a no-deal outcome and could help affected sectors. Brexiteers have long argued that Europe’s biggest economy, Germany, which exports hundreds of thousands of cars to Britain each year, would protect that trade.

Nissan said it was examining a host of scenarios and wants the tariffs not to be applied if Britain leaves the bloc without an agreement.

“We are asking not to have tariffs being applied in a no-deal scenario because otherwise the tariffs won’t be sustainable for us,” De Ficchy said.

In 2016, Nissan said it would build its next-generation Qashqai vehicle at the factory, key to maintaining staff levels of around 6,000 people at the site and an example of how far in advance major decisions are taken.

Reuters