Nissan could close its Sunderland factory if the UK leaves the European Union without a trade deal, according to reports in the Financial Times. The newspaper, citing three people with knowledge of the matter, reports a no-deal Brexit could prompt the Japanese firm to stop making the Qashqai SUV at the site – which could ultimately lead to the closure of the plant. In November 2016, Nissan pledged to build the hugely popular Qashqai in the UK, after then-chairman Carlos Ghosn received assurances from then-prime minister Theresa May that the firm’s operations would be protected from the impact of Brexit – but the agreement was reportedly contingent on a ‘soft’ Brexit with an EU trade deal. The FT claims that, under a global review Nissan has since undertaken, the Sunderland plant could be downsized or even closed if a no-deal Brexit makes it uncompetitive to ship cars from the site to the EU. Currently, Nissan also makes the Juke and Leaf models at Sunderland. In a statement issued to Autocar, Nissan said: “While we don’t comment on speculative scenarios, our plans for Qashqai production in Sunderland have not changed.” But the firm did warn that a no-deal Brexit could have a serious impact on British-based industry. It added: “Since 1986, the UK has been a production base for Nissan in Europe. Our British-based RD and design teams support the development of products made in Sunderland, specifically for the European market. “Frictionless trade has enabled the growth that has seen our Sunderland plant become the biggest factory in the history of the UK car industry, exporting more than half of its production to the EU. “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. “As a sudden change from those rules to the rules of the WTO will have serious implications for British industry, we urge UK and EU negotiators to work collaboratively towards an orderly balanced Brexit that will continue to encourage mutually beneficial trade.” Current prime minister Boris Johnson has said he is committed to the UK leaving the EU on the currently scheduled date of 31 October regardless of whether a deal has been agreed. A no-deal Brexit would mean UK-built cars such as Nissan models made at Sunderland would be subject to tariffs when being shipped to Europe. But under a trade agreement between the EU and Japan, Nissan would be able to export models made in its home country into the EU without tariffs. That would potentially make it more profitable to make models for Europe in Japan rather than the UK. Earlier this year, Nissan reversed a decision to make the next-generation of the X-Trail SUV at Sunderland, citing Brexit concerns and the decline of diesel as reasons. The plant also recently lost the Infiniti Q30 and QX30, after Nissan decided to withdraw its premium sub-brand from Europe. It has also cut back a number of jobs at the plant as part of a global cost-cutting initiative. Nissan opened its Sunderland plant in 1986, and is believed to have invested more than £4 billion in it since then. The plant has recently been upgraded to prepare for the next-generation Juke crossover, which is due to go into production shortly. Honda is in the process of closing its Swindon factory, in a move it says is not primarily due to Brexit. But BMW and Toyota have warned they could switch production from the UK in the case of a no-deal
Origin: Nissan ‘to review future’ of Sunderland plant in case of no-deal Brexit
Brexit
Lotus CEO Phil Popham on the Evija hypercar, future plans and Brexit
Lotus has just revealed the 1973bhp Evija, the all-electric hypercar it claims will be “the most powerful production car in the world”. Talking to Autocar at the reveal event, CEO Phil Popham explains the thinking behind the Evija and the next steps for the iconic sports car brand. Why have you chosen to build a car like this — so exclusive and expensive? Popham: “We believe that if you want to make ripples, you have to made a splash. If you want to be on the map, you have to make a mark. This car shows what our future can be like. It shows what we can do, and it paves the way for future visionary Lotus models.” Does it mean you’re planning a succession of hyper-expensive models? “First of all, our 10-year plan, which we call Vision 80, contains a commitment to be ‘for the driver’, first, last and always. Lotus models will always be at the heart of driver involvement and enjoyment. But the range of cars we have now runs from the mid £50,000s to well over £100,000 and we see our core future models, apart from our new Hypercar, as continuing to be in the that range. Having said that, we do believe the Lotus brand has the equity to go beyond where it is. But that’s not our immediate strategy.” What is your immediate strategy? “After we’ve built our 130 hypercars we’ll concentrate on rebuilding our core sports car range. We will have a combustion-powered sports car to show you towards the end of next year, for sale after that. Beyond that car, every Lotus, in whatever segment, will have a full electric version.” There’s been a suggestion that in your journey towards electrification you might skip hybrids all together… “That is certainly an option.” How much will you grow under the 10-year plan? “Let’s start from the beginning. We made 1700 cars last year, but as it currently stands Hethel make over 5000 on a single shift. That means over 10,000 on a double shift — and I believe we’ll outgrow Hethel in its current guise. After all, we have an ambitious plan to move into new segments.” What will you do when you’ve outgrown Hethel? “We can either do something radical at Hethel, or we can move somewhere else as well. But it’s important to say that making cars in different locations wouldn’t change the DNA of the company. We won’t build anything unless it’s a) profitable, and b) can be called a true Lotus. And we’d never made the same car in multiple locations.” Isn’t your ‘For the driver’ strap-line rather time-limited? Surely we’re moving closer to full autonomy? “I don’t believe it will become time expired. Progress with other, much bigger manufacturers tends to focus on mobility and ownership models, which are leading to cars becoming commoditised. But a Lotus will always be a car to use and enjoy in your leisure time. But we’ll certainly harness some of the great technology of the future.” How do you believe Brexit is affecting Lotus? “Our message to the government over the past three years hasn’t changed: we just need to get this deal done. And it now looks like that’s what will happen. Even if we exit without a deal, we believe other deals will be done; we have hundreds of years of history as a trading nation to help us through. Meanwhile at Lotus we’re taking short-term contingency steps. We’re planning for some disruption. But nothing about Brexit will change our core
Origin: Lotus CEO Phil Popham on the Evija hypercar, future plans and Brexit
No-deal Brexit would cost UK car makers billions in emission fines
A no-deal Brexit could cost the UK automotive industry at least £3 billion in CO2-related fines, Autocar has learned. The costs represent the fines that would be racked up by the 40-plus manufacturers operating in the UK and who would fall foul of the 95g/km fleet average CO2 figure, which the government has pledged to implement unilaterally if the UK goes-it-alone in October. A spokesman for the Society of Motor Manufacturers and Traders (SMMT) said: “The European CO2 Directive allows manufacturers flexibility to balance their emissions performance across all relevant European markets. A no deal Brexit would, however, remove this flexibility, which may make reduction targets far harder for some manufacturers, given the UK model mix may differ from a European average. “If this meant additional fines were to be levied on UK companies, the effects could be hugely damaging, reducing consumer choice, undermining competitiveness and restricting future RD spend. This is yet more evidence of the severe consequences for the British automotive industry from a disorderly Brexit – no deal must be ruled out immediately.” Although the concept of the UK adopting the 95g/km CO2 average has been well-flagged – it was a key element in government No Deal Brexit planning documents – the impact on individual car-makers and the industry as a whole is only just starting to emerge. The significant issue is that the UK fleet average figure would be based purely on UK sales, making it less likely for sales of heavier cars with larger engines, especially the growing mix of SUVs models, to be balanced out by cheaper, lower polluting city cars and superminis. One mass-market manufacturer that Autocar spoke to has carried out an internal audit of its annual new car sales and calculated its fleet mix of petrol, diesel, hybrid and electrified models would rack up around £100m in fines. The fines could be reduced by altering the mix of powertrains in favour of more electrified models, but factory capacity for such a dramatic short-term change in output is limited, largely because CO2-planning is being organised on an EU-wide basis and production plans for 2020/2021 have already been committed. More diesels would help cut CO2 figures – but the government is actively shutting down that route by demonising diesel with threatened policy initiatives that have cut consumer demand. Across Europe, brands have been planning their CO2 fleet averages with sales of larger cars in northern Europe balanced out by smaller cars in southern Europe. The UK’s Brexit plan cuts the UK industry off from this product planning mix, exposing UK car companies to huge fines. The manufacturer that Autocar spoke to has ‘gamed’ several potential scenarios, the most severe of which would require a 20 per cent cut in sales in 2021 and a significant drop in profitability. Although that would reduce fines to a more reasonable £5m to £10m, the effect on its business would be
Origin: No-deal Brexit would cost UK car makers billions in emission fines
SMMT urges next PM to seek automotive-focused Brexit deal
Car industry bosses have called on the UK’s next prime minister to prioritise a trade-oriented Brexit deal, claiming that delays caused by a no-deal Brexit could cost the manufacturing sector £50,000 a minute. That figure comes from a new UK Automotive Trade Report published by the Society of Motor Manufacturers and Traders (SMMT), that looks at the potential costs caused by delays at the UK/EU border. The SMMT states that, because car production facilities depend on a ‘just-in-time’ operating model, any delayed order of components or materials from abroad would have a significant knock-on effect, which could result in a £70 million per day penalty in the worst case scenario. The financial impact of these delays would be compounded by heavy trade tariffs imposed by the World Trade Organisation, amounting to £4.5bn globally for passenger car trade alone, to which the UK would be subjected in the event of a no-deal Brexit. The SMMT claims the commercial freedom cultivated by the customs union and single market has helped the UK automotive sector grow from £47bn in the wake of the 2009 recession, to £101bn in 2018. This 118% increase was due, in part, to the fact that 80% of vehicles produced in England were exported to the EU. According to the SMMT’s report, the UK and EU trade 3.3m new cars annually, with the UK also shipping £5.2bn worth of components and £2.9bn of engines to production facilities across the continent. Automotive production accounts for 14% of all UK goods, with vehicles and parts shipped to 160 countries worldwide. Any threat to the country’s ability to trade affects not just its economic standing, but the livelihoods of the 168,000 people employed across the sector. The SMMT warns that, without automotive’s £18.6bn-per-year contribution to the national economy, the UK would fall from 10th biggest global exporter of goods, to 14th. A Brexit deal must, argues the organisation, encourage the survival of both a competitive business environment and healthy market. The SMMT forecasts that an automotive-focussed agreement could increase the UK’s automotive trade value by up to 20%. The SMMT’s chief executive, Mike Hawes, said: “We are already seeing the consequences of uncertainty, the fear of no deal. “The next PM’s first job in office must be to secure a deal that maintains frictionless trade because, for our industry, ‘no deal’ is not an option and we don’t have the luxury of time.” In April, the UK car manufacturing sector slumped 44.5% compared with the same period in 2017, as a result of numerous factory shutdowns timed to coincide with Britain’s original EU departure date. It was the 11th consecutive month in which manufacturing output
Origin: SMMT urges next PM to seek automotive-focused Brexit deal
Brexit shutdowns cause UK car production slump in April
A number of factory shutdowns timed to coincide with the originally scheduled date of Britain’s departure from the European Union led to a dramatic 44.5% year-on-year slump in UK car manufacturing in April. A total of 70,9871 cars were built in the UK in April, down 56,999 on the 127,970 produced in the same month of 2018, according to data produced by the Society of Motor Manufacturers and Traders (SMMT). It was the 11th straight month in which manufacturing output declined. While UK manufacturing has been substantially down in 2019 – with a 22.4% year-on-year decline so far – the April figures were heightened by several car firms, including Jaguar Land Rover, Honda, BMW, Mini and Rolls-Royce, bringing forward production stoppages usually planned for the summer to guard against any delays caused by Britain leaving the European Union, which had been due to take place on 29 March. Brexit was subsequently delayed, and is now scheduled to take place on 31 October. It is highly unlikely firms will be able to suspend production again following this date, and SMMT president Mike Hawes again called on politicians to rule out a ‘no deal’ Brexit to minimise further damage to the industry. Hawes said the figures were “evidence of the vast cost and upheaval Brexit uncertainty has already wrought on UK automotive manufacturing businesses and workers”. He added: “Prolonged instability has done untold damage, with the fear of ‘no deal’ holding back progress, causing investment to stall, jobs to be lost and undermining our global reputation. “This is why ‘no deal’ must be taken off the table immediately and permanently, so industry can get back to the business of delivering for the economy and keeping the UK at the forefront of the global technology race.” Production figures in April were also hit by a decline in demand in both the UK and overseas, including the continuing struggles within the Chinese and EU markets. The SMMT estimates that, if the UK leaves the EU with a “favourable deal and substantial transition period”, the decline in production will ease by the end of the year – although in this best-case scenario year-on-year output would still be around 10.5% down on
Origin: Brexit shutdowns cause UK car production slump in April
Brexit and diesel fears stall car sales, says new research
As news of yet another monthly fall in new car sales emerged last week, there is strong new evidence that substantial numbers of car buyers are delaying purchases as a direct result of Brexit and confusion over powertrain choices. Exclusive data has been collected for Autocar by market research firm Simpson Carpenter from a sample of more than 1000 British car owners. It shows that among those whose car is more than two years old, almost half said they had originally planned to replace their car before now. Younger people and those buying or leasing new cars are most likely to be delaying their purchase. An underlying level of delay is to be expected, as changes in personal circumstances often get in the way of new car buying decisions. But one in four of those surveyed attributed the delay to the effects (potential or already felt) of Brexit, and 39% cited general economic concerns as a reason. A mix of uncertainty about the future of diesel and confusion over which powertrain to buy are the reasons mentioned by 27% of those sampled. Both Brexit and powertrain concerns have hit the new car market harder than the used, according to the data, with both factors cited by a majority of those intending to get a new car the next time they do upgrade. The premium car category is most badly hit: around a third who mentioned the two factors intend to buy more expensive cars. The hiatus seems likely to continue until the Brexit uncertainty is resolved. Almost a third claim they will put off their purchase until the effects become clear, with those aged 25-44 and those intending to buy in the next two years most likely to delay their decision. Conversely, two-thirds claim their next car purchase won’t be affected. Brexit appears to be affecting people’s choice of brand, too. One in five say they are more or less likely to buy certain marques as a result of Brexit, with German brands such as BMW, Volkswagen and Audi and French brands such as Renault, Peugeot and Citroën all most likely to be dropped from consideration. More people are likely to buy Fords and Toyotas, although Nissan loses slightly more than it gains – possibly as a result of the decision not to build the X-Trail in Sunderland. Tom Simpson, managing director of Simpson Carpenter, said: “New car sales are clearly being damaged by a political failure to provide clarity – firstly over the future of diesel and then the seemingly neverending Brexit negotiations. “The new car market is unlikely to recover until these uncertainties are resolved. And in these circumstances, it’s difficult to criticise car manufacturers if they delay decisions to invest in the UK.”
Origin: Brexit and diesel fears stall car sales, says new research
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