Nissan will consider moving production of its SUVs outside the UK if the country leaves the European Union without a trade deal, people familiar with the matter said.
Manufacturing of the Qashqai compact SUV could be moved to Spain, while the subcompact Juke may move to another overseas plant, said the people, who asked not to be identified as the discussions are confidential.
The departure would be a major blow to UK manufacturing because Nissan’s flagship factory in Sunderland, northeast England, is Britain’s largest.
A showcase for automation and modern working practices, the plant helped to propel Britain to record auto output and sales in 2016, before concerns about the Brexit vote and a government campaign against diesel models began to weigh on demand.
The Financial Times reported earlier Tuesday that Nissan will review Qashqai production at Sunderland if the UK exits the EU without a deal, which would damage supply chains.
It could prompt the eventual closure of the factory, the paper said.
Former British Prime Minister Theresa May struck a 2016 deal with Nissan to ensure the automaker continued to build the Qashqai in Sunderland, a huge boost to the government as it came in the months after Britain voted to leave the bloc.
A source at the time told Reuters that the government had promised extra support to Nissan in written assurances that Brexit would not hit the competitiveness of the plant, which exports 55 per cent of its cars to Europe.
Former CEO Carlos Ghosn, who was involved in that decision, has since been fired by Nissan.
Earlier this year Nissan cancelled plans to build its new X-Trail SUV in Sunderland, saying the uncertainty surrounding Britain’s future relationship with the EU after Brexit was making it harder to plan for the future.
Nissan said in an email that while it doesn’t comment on speculation, plans for Qashqai production haven’t changed.
“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 the EU will look like,” the company said.
“We urge UK and EU negotiators to work collaboratively towards an orderly balanced Brexit that will continue to encourage mutually beneficial trade,” Nissan said.
Automakers that build cars in the UK have been campaigning against a no-deal split since the 2016 referendum.
Last week, Jaguar Land Rover said it would close its British factories for a week in November to guard against disruptions to supply chains from a possible no-deal Brexit.
The announcement followed a warning from more than 20 European trade groups that such a breakup would have an “immediate and devastating impact, undermining competitiveness and causing irreversible and severe damage.”
BMW plans to halt production at its Mini plant in Oxford for two days on Oct. 31, and said earlier that it would reduce output by eliminating a work shift in the event of a no-deal split.
Vauxhall owner PSA Group has said a decision whether Ellesmere Port keeps production of the Astra compact car depends on the UK’s future trading terms with the European Union.
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