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Money News

Nissan's Britain business tough to sustain without Brexit trade deal - COO Gupta

TOKYO (Reuters) - Any final exit by Britain from the European Union that worsens business conditions through increased tariffs would threaten the sustainability of Nissan Motor Co’s UK operations, the Japanese car maker’s chief operating officer cautioned.

Nissan, which employs 7,000 people at Britain’s biggest auto plant in the northeastern city of Sunderland called in June for an “orderly balanced Brexit”.

But the latest warning comes as the EU cautions Britain it has fewer than 10 days left to secure a deal governing trade from next year.

“If it happens without any sustainable business case, obviously it is not a question of Sunderland or not Sunderland, obviously our UK business will not be sustainable, that’s it,” Ashwani Gupta, Nissan’s chief operating officer (COO), told Reuters on Wednesday.

Almost 11 months after it formally quit the union, Britain and the EU have still not worked out a deal to cover nearly $1 trillion in annual trade following a transition period that has kept custom rules in place.

Prime Minister Boris Johnson has warned his top ministers that a trade pact is far from certain, but added that Britain would thrive with, or without, a deal.

In March, Nissan said it would push ahead with a 52-million-pound ($69 million) expansion at Sunderland to build its new Qashqai sports utility vehicle.

Nissan Motor COO Ashwani Gupta speaks during a news conference at Nissan Motor headquarters in Yokohama, Japan, December 2, 2019. REUTERS/Kim Kyung-Hoon/Files

When it announced the plan in 2016, Nissan, which builds its Leaf electric cars there, said Britain had reassured it Brexit would not affect its competitiveness.

But tariffs resulting from a no-deal Brexit would raise costs for Nissan, while any delay in the supply of parts from overseas, because of new customs checks, could slow production.

That potential Brexit disruption to supply chains that stretch across Europe could also hurt other manufacturers, hitting an economy reeling from the coronavirus pandemic.

Gupta said Nissan was not seeking compensation from Britain for costs incurred from any no-deal Brexit, contradicting media reports that it and Toyota Motor Corp would do so.

“We are absolutely not thinking that and we are not discussing it,” he said. “Our commitment remains, and it will continue as far as our business is sustainable.”

Toyota runs a plant in the Midlands county of Derbyshire and builds engines at a factory in Wales.

Honda Motor, which builds its Civic cars in Swindon in southern England, said last year it would close its only plant in Britain with the loss of up to 3,500 jobs because of the decision to leave the EU.

Regarding a separate plan by Johnson to bring forward to 2030 from 2035 a UK ban on new petrol and diesel cars and vans, the Nissan executive said his company was ready to respond.

“That is not only the UK’s transition plan, every country is talking about electrification. We are ready.”

Like other carmakers, Nissan is rolling out new electric vehicles and autonomous drive cars as demand for the new automotive technology as markets, led by China, rebound from a demand slump caused by the pandemic.

($1=0.7544 pounds)

Reporting by Tim Kelly and Dave Dolan in Tokyo; Additional reporting by Joe White in Detroit; Editing by Himani Sarkar and Clarence Fernandez

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