Brexit decoy for Nissan’s U-turn

Richard Bartlett-Rawlings, partner at RSM commenting on Nissan’s investment U-turn: 

‘The recent announcement from Nissan to build its X-Trail SUV in Japan rather than Sunderland is clearly a blow for the automotive manufacturing industry in the UK. In response, the Brexit rhetoric has been amplified, but the predominant drivers behind this decision are demand driven. 

‘Mainly it is the current stagnation in the EU diesel market and the oversupply in the SUV market which has caused much of the decline in interest in this platform; and therefore, the quantities to be built will most likely be well below the volumes originally planned in the initial assessment when announced. This reduction in volume would have no doubt impacted the level of job creation required to secured key funding from the government – making the grant agreement null and void. 

‘The move to Japan would reflect that the vehicles will most likely be produced in far smaller numbers and a new focus on markets outside the EU. If the move was due to Brexit alone then Nissan could have set up production in Spain where they have two plants. 

‘There is no doubt that Brexit uncertainty is affecting manufacturers across the UK, but on this occasion, Brexit could be being used a decoy for underlying changes in the trading environment for car manufacturers in Europe and the UK.’