News | Published June 03 2020

Failure to agree EU trade deal could threaten Sunderland car plant

The global chief operating officer of Nissan has warned that its Sunderland car manufacturing plant will be “unsustainable” if the UK and EU do not reach a tariff-free trade deal.

Ashwani Gupta said that the EU was the plant’s biggest customer and that tariff-free access would be essential for the factory to continue operating.

Those words came even though Nissan said that it remains committed to Sunderland after closing down factories in Spain and Indonesia as part of a global restructure of the business. The Sunderland site hosts 7,000 workers.

70 per cent of cars rolled out of the Sunderland plant are sold in the EU. Under a default no-deal scenario, which would see UK-EU trade switch to World Trade Organization terms, the cars would be subject to tariffs of 10 per cent.

Gupta said: "We are the number one carmaker in the UK and we want to continue. We are committed. Having said that, if we are not getting the current tariffs, it's not our intention but the business will not be sustainable. That's what everybody has to understand."

Nissan’s partner Renault has also distanced itself from suggestions that it could take up spare capacity at the Sunderland plant, saying that it does not have any plans to move manufacturing operations into the UK. The French government holds a 15 per cent stake in Renault.

Gupta said: "When it comes to the allocation of manufacturing, each company will take the decision based on the competitiveness of the plants."

Nissan itself only has a three percent share of the vehicle market in Europe, and its largest global market is in China. However, no Nissan cars for the Chinese market are manufactured in the UK, so news of the Chinese market recovering after being hit by Covid-19 will provide little reassurance for the future of the Sunderland site.

UK and EU trade talks resume once more this week, but limited progress has been made due to differences on both sides concerning key issues.

Chief EU negotiator Michel Barnier has hinted that the bloc would consider extending the post-Brexit transition period, due to lapse in December 31, 2020, by two years.

However, the UK government has long opposed any further extension and the UK’s leading negotiator David Frost told MPs this week that its position would remain unchanged.

The UK must decide by the end of June whether it wishes to pursue an extension. 

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Authored by

Alexander Bridge-Wilkinson
Junior Editor
June 03 2020

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