LONDON (REUTERS, DPA) - Japanese carmaker Nissan has scrapped plans to build its new X-Trail SUV in Britain, saying just two months before Brexit that it had taken the decision to “optimise its investments” by building the next generation model in Japan.
“The company has decided to optimise its investments in Europe by consolidating X-Trail production in Kyushu, the production hub for this global model,” the company said in a statement on Sunday (Feb 3).
“While we have taken this decision for business reasons, the continued uncertainty around the UK’s future relationship with the EU is not helping companies like ours to plan for the future,” said Europe Chairman Gianluca de Ficchy.
Nissan first said four months after Britain voted in June 2016 to leave the EU that it would manufacture a new model of the SUV in Britain, which was seen as a major vote of confidence in the country's manufacturing future.
The main production plant for the current X-Trail is in Japan, while Nissan's plant in Sunderland, north-east England, makes the smaller Qashqai SUV and other models.
Broadcaster Sky News, which had reported the Nissan decision on Saturday (Feb 2), said the announcement was not expected to lead to immediate job losses at the Sunderland plant, as the X-Trail is not currently made there, but would raise doubts about further Nissan investment in Britain.
British MPs on Saturday said they were "deeply troubled" by the reports.
Local MP Bridget Phillipson, tweeted that the reports "represent deeply troubling news for the north east economy - So many jobs and livelihoods depend on Nissan's success."
Colleague Julie Elliott said Brexit had played an "inevitable role" in the decision, adding that "none of it is conducive to encouraging business investment in this country".
As well as the X-Trail, Nissan said in 2016 that it would build the next generation Qashqai SUV in Britain after receiving government assurances over Brexit, in what was seen at the time as a boost for Prime Minister Theresa May.
However, the failure of Britain's government so far to negotiate a smooth exit plan from the EU has made car manufacturers less willing to use Britain as a European manufacturing centre.
Investment in Britain's car industry halved last year, data showed last Thursday, and car production by Nissan in Britain fell by more than 10 per cent.
Industry body the Society of Motor Manufacturers and Traders said leaving the EU on March 29 without a transition deal to preserve the smooth flow of parts and finished vehicles across EU borders would cause "permanent devastation" to the British car industry.
Other multinational giants including Airbus warned this week that British jobs could suffer in the event of an unfavourable Brexit outcome.
Meanwhile, PM May has said she will seek a "pragmatic" Brexit deal that can win over both the EU and her own lawmakers when she returns to Brussels for talks.
Writing in the Sunday Telegraph, Mrs May suggested that Labour leader Jeremy Corbyn had agreed with her that the Irish border backstop as set out in the Withdrawal Agreement had to change.
Mrs May said she was listening to figures from across politics, the trade union movement and business in her quest for a feasible Brexit compromise.
"It's why when I return to Brussels I will be battling for Britain and Northern Ireland, I will be armed with a fresh mandate, new ideas and a renewed determination to agree a pragmatic solution that delivers the Brexit the British people voted for, while ensuring there is no hard border between Northern Ireland and the Republic of Ireland," she added.
"That is what Parliament instructed me to do on Tuesday night," she asserted.