Nissan boss says no-deal Brexit could make its business model unsustainable

Nissan boss says no-deal Brexit could make its business model unsustainable
Nissan boss says no-deal Brexit could make its business model unsustainable

A no-deal Brexit that led to a 10 per cent tariff on exports would make Nissan’s European business model unsustainable, its chairman has warned.

Gianluca de Ficchy said the business was prepared for Brexit scenarios but could not plan long term.

He was speaking at the UK’s biggest car plant in Sunderland, where production is due to start on the new model of the Juke.

Two-thirds of the components for the Juke come from the EU and 70 per cent of production was aimed at the continent.

‘Current uncertainty’

The Nissan plant is in an area which voted leave (Photo: Owen Humphreys/PA Wire)
The Nissan plant is in an area which voted leave (Photo: Owen Humphreys/PA Wire)

Mr de Ficchy said: “It is important to have some clear discussions about the future and about the situation in which we have to operate, which we have with Brexit.

“There has been many speculations about the current uncertainty. I wish to clarify the Nissan position about that.

“We have been working together in Europe to define all the risks associated with Brexit coming in and we think we are all really well prepared.

“I think from an operational point of view we have worked in order to prepare for all the different scenarios.”

He added: “If a no-deal scenario means the sudden application of WTO tariffs, we know in that case our business model won’t be sustainable in the future.

“Our industry works with lower margins and if we are in a situation in which tomorrow we have to apply 10 per cent export duties to 70 per cent of our production, the entire business model for Nissan Europe will be in jeopardy.

“That’s the reason why we continue to work with all scenarios.”

Too many variables

Mr de Ficchy said there may be some off-setting of tariffs on imported components and exported cars, but there were too many variables for the business to plan.

He said the quality of the work done on Sunderland since it started production in 1986 meant the business still planned to manufacture there, with £100 million invested in Juke production.

He said: “We know the workforce is concerned about that situation (Brexit) – we are also concerned. That’s the reason we are here – to express our concerns.”

Nissan’s importance to Sunderland

The Sunderland Nissan factory is a vital part of the local economy in a city that voted by 61.3 per cent to quit Europe.

The site, which has been active since 1986, is the most productive car plant in the country and employs almost 7,000 people who produce 2,000 cars a day.

Around 27,000 jobs in the supply chain also rely on Nissan, with around 240 companies in and around Sunderland supplying parts for the automotive industry and generating approximately £11bn in revenues each year.

Nissan arrived in Sunderland while the city was recovering from the collapse in 1980 of its once-great ship building industry, when the last of an estimated 400 yards on the River Wear closed.

In 2016, it emerged the Government had offered Nissan a sweetheart deal of £61m in the wake of the Brexit vote to safeguard the car maker’s investments in the north east.

Since the referendum, the company has announced a 10 percent cut in global production and the loss of 12,500 jobs worldwide.

But when i visited the city following the announcement, residents insisted they would vote again to leave the EU if a second referendum was called.

“I still want out,” James Catcheside said at the time. “We just need to get on with it.”

Additional reporting from Press Association.