Sunday 3 February 2019 8:51 pm

There’s more to Nissan’s X-Trail move than Brexit, but there’s no denying the cost of uncertainty

The UK may or may not leave the EU on 29 March, and if it does the departure may or may not be facilitated by a formal withdrawal agreement. Unfortunately that's about as precise as anyone can be at the moment.

With politicians still wrangling over the kind of Brexit that may emerge, businesses from key sectors are contending with intense political uncertainty in addition to the range of challenges and upheavals that they already face.

The automotive industry is perhaps the most critical example of a sector already being buffeted by regulatory and technological headwinds, and which now counts Brexit confusion as another unwelcome element of the storm.


Yesterday Nissan confirmed that it has reversed a decision to build the X-Trail model at its Sunderland plant, reneging on a plan it announced – to much ministerial acclaim – in 2016. The company's official statement said that in order to support heavy investment in new technology and equipment at its Sunderland operations (where the Juke, Qashqai and Leaf models will continue to be produced) it has decided to consolidate the X-Trail's production in its Japanese facility.

This is a perfectly rational investment decision which was taken, in the words of Nissan Europe Chairman Gianluca de Ficchy, “for business reasons.” However, he went on to note that “the continued uncertainty around the UK's future relationship with the EU is not helping companies like ours to plan for the future” – while a letter to Nissan's Sunderland employees noted that the news “will be interpreted by a lot of people as a decision related to Brexit.” They can say that again.

As soon as the news emerged, Remain campaigners pinned the blame squarely on the UK's decision to leave the EU while vocal Leave advocates said it was more to do with the decline in diesel sales and a struggling automotive sector.

In a rare occurrence for the UK's highly-charged Brexit debate, both sides are correct. Many businesses assumed, not unreasonably, that they would by now have known the outline shape of the UK's future relationship with the EU.

Given the shameful absence of this information they can be forgiven for shaking up their future investment plans – especially if, as in the case of Nissan, they already face a plethora of market challenges.

 

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