No-deal – All about car

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

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