October 1, 2019 / 12:27 PM / in 17 days

No-deal Brexit could prompt Nissan factory rethink: FT

LONDON (Reuters) - Japanese carmaker Nissan (7201.T) will review its decision to build the Qashqai SUV in northern England if Britain leaves the EU without a deal, potentially leading to the closure of the Sunderland plant, the Financial Times reported.

FILE PHOTO: A man walks past a sign at the Nissan car plant in Sunderland, Britain February 4, 2019. REUTERS/Phil Noble

The vast site holds a symbolic position in the UK after former Prime Minister Margaret Thatcher lured Nissan there in 1986, beginning a recovery in British car-making after its near collapse in the 1970s.

Britain’s big carmakers, all foreign owned, had urged Britons to vote to stay in the European Union in the 2016 referendum and have warned ever since that they will struggle to operate if the normal European trade arteries are disrupted.

All carmakers rely on supply chains that run across Europe, bringing components to factories on a just-in-time basis.

In the months after the 2016 vote the then prime minister, Theresa May, struck a deal with Nissan to keep it in Britain, promising extra support in written assurances that Brexit would not hit the Sunderland plant’s competitiveness.

Former Chief Executive Carlos Ghosn, who was involved in those negotiations, has since been fired by Nissan.

The FT quoted three people with knowledge of the matter as saying that the decision to build the Qashqai in Britain had been contingent on a so-called “soft” Brexit that included a smooth transition.

“While we don’t comment on speculative scenarios, our plans for Qashqai production in Sunderland have not changed,” a company spokesman said.

Nissan has already canceled plans to make the next model of its X-Trail SUV in Sunderland, saying in February that uncertainty over Brexit was making it harder to plan for the future. It decided to produce the vehicle solely in Japan.

Britain has already delayed two deadlines to leave the bloc and Prime Minister Boris Johnson has vowed to deliver Brexit at by the end of October, with or without a deal, alarming companies that rely on trade routes to operate.

Japanese companies including automakers Honda (7267.T) and Toyota (7203.T) have long seen Britain as the gateway to Europe.

The Nissan spokesman said that frictionless trade had enabled the Sunderland plant to become the biggest factory in the history of the British car industry, exporting more than half of its production to the EU.

“Today we are among those companies with major investments in the UK who are still waiting for clarity on what the future trading relationship between the UK and EU will look like,” he said.

Reporting by Kate Holton; Editing by Guy Faulconbridge and David Goodman

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