Nissan will build two new car models at its Sunderland plant, a vote of confidence in the UK following the Brexit referendum that will boost hopes other carmakers with pending investment decisions will continue to locate their work in Britain.
The Japanese carmaker, second only to Jaguar Land Rover as the largest auto manufacturer in the country, said on Thursday it would produce the new model of its Qashqai SUV at the plant, as well as the X-Trail SUV, which is currently made in Japan.
The Nissan decision had been closely watched by economists and analysts as a signal of how multinational manufacturers would approach Britain as it prepares to exit the EU, particularly since many use the UK as an base to export into Europe.
It is the first UK investment decision by an international carmaker since the vote in June and was made following assurances from the prime minister to Nissan chief executive Carlos Ghosn that the company would be protected from its impact.
The British economy has defied economist expectations of a sharp downturn following the Brexit vote, and the Nissan announcement came as strong data for economic growth and car exports continued to show the UK economy’s resilience to the referendum shock.
Official figures on Thursday showed GDP in the third quarter rose 0.5 per cent — flouting Treasury warnings that a Brexit vote would spark an immediate recession — while the number of cars made in Britain for the international market passed 1m in the first nine months of the year, a record high for the industry, according to the UK trade body SMMT.
In addition, Nissan’s Japanese rival Toyota, which owns two plants in the UK employing 3,400 people, said it would stay in Britain even if trading conditions tighten after a Brexit.
Didier Leroy, Toyota’s most senior non-Japanese executive, said the group had a “fighting spirit” and is “not always looking everywhere in the world to go to the cheapest country”.
Nissan’s Sunderland factory was opened in 1986 and is the largest car plant in the UK, producing around 500,000 vehicles a year and employing 7,000 people. The company said its investment decision “follows the UK government’s commitment to ensure that the Sunderland plant remains competitive”.
Downing Street denied any carmaker had been given specific reassurances on issues such as tariffs, infrastructure or visas. A spokesman said the assurances given to Nissan were only that “we will get the best possible deal for Britain as we leave the European Union”. Theresa May, prime minister, described it as “fantastic news for the UK”.
Mr Ghosn said he welcomed “Theresa May’s commitment to the automotive industry in Britain” and her promises to develop a national industrial strategy. “The support and assurances of the UK government enabled us to decide that the next generation Qashqai and X-Trail will be produced at Sunderland,” he added.
Access to the European market is key to the future of the Nissan site: more than 80 per cent of its cars are exported. Mr Ghosn has described it as a “European plant based in Britain”.
Although the vehicles are not expected to begin production until 2019, car companies must make investment decisions several years in advance.
The addition of the X-Trail may mean hundreds of new staff. While one of the production lines at the plant runs three shifts around the clock, the second line only has two and may need to add a third. One manager at the plant said it was “excellent news given all the speculation after Brexit”.
Other carmakers, including Toyota, Honda and General Motors’ Vauxhall, also face decisions about whether to make new models in the UK and may have to decide before trading arrangements with the EU are known.
Britain’s car industry has had a renaissance because of investment from international carmakers, many of which are heavily reliant on exports. UK plants made 1.6m vehicles last year, and are on track to hit record production levels of 2m by the end of the decade.
Additional reporting by Henry Mance
Nissan to build new models in UK despite Brexit vote – Financial Times