Nissan has drawn up a plan to pull out of mainland Europe if Brexit leads to tariffs on car exports — but to double down on the UK, where the Japanese company believes it could sell one in five cars.
Two people involved in the discussions said the contingency plan, drawn up late last year, would see Nissan close its struggling Barcelona van facility and stop manufacturing in France.
Under the scenario, the Sunderland plant in the UK would be maintained as part of an audacious attempt to steal market share from other carmakers.
If carmakers that import to Britain such as Ford and Volkswagen face tariffs that make their cars more expensive, Nissan’s UK-made models would have a competitive edge, allowing the company to grow from 4 per cent of the market currently to as high as 20 per cent, according to the two people.
The scenario is one of several that the carmaker developed to plan for post-Brexit tariffs. People familiar with the discussions cautioned that the contingency plan was drawn up before Makoto Uchida was installed as the new chief executive in December.
Both the EU and the UK are expected to lay out tough negotiating positions today ahead of trade talks next month. Brussels will insist that market access be directly linked to Britain’s willingness to align with the bloc’s regulations when it unveils its proposals, while the UK will reject the idea of accepting EU rules.
Nissan’s public position is that the UK plant would be threatened along with its European business if the UK fails to maintain tariff-free access to the EU.
“We deny such a contingency plan exists,” said a spokesman for Nissan Europe. “We’ve modelled every possible ramification of Brexit and the fact remains that our entire business both in the UK and in Europe is not sustainable in the event of WTO tariffs …We continue to urge UK and EU negotiators to work collaboratively towards an orderly balanced Brexit that will continue to encourage mutually beneficial trade.”
Nissan’s warnings have prompted fears that the company would eventually be forced to close its Sunderland production site if UK prime minister Boris Johnson fails to secure a deal with the EU.
But the Japanese carmaker has invested more than £4bn in the site, the largest in the UK with 6,000 workers, and is determined to keep the facility operational even at the expense of abandoning its exports-based model.
The plant, which is Nissan’s most efficient outside Japan, already makes three of Nissan’s five core models — the Qashqai, the Juke and the electric Leaf.
Under Nissan’s tariff scenario, the Micra — a small car that shares a wheelbase with the Juke and is produced in a Renault plant in France — would be moved back to the UK. The company would also explore Sunderland producing the X-Trail, the largest of its models and one it previously planned to make in the UK.
The site is equipped to make up to 600,000 cars a year, but last year output fell by a fifth to 350,000, with 80 per cent of the vehicles exported. Under the scenario of selling only to the UK and growing sales, the plant could reach 400,000.
Its reliance on components imported from Europe — which would face tariffs under a hard Brexit — will also reduce as the brand winds down its use of diesel engines made by Renault. Nissan plans to eliminate the fuel source from its line-up from 2022.
The idea of abandoning the business in mainland Europe underscores how far Nissan’s fortunes have declined in the region, where sales fell 17 per cent to 567,000 vehicles last year and most operations are lossmaking due to a sharp decline in diesel demand.
Other carmakers have hinted at the possibility of growing in the UK after a hard Brexit with Carlos Tavares, chief executive of Peugeot owner PSA, promising in that situation to step up the company’s presence in the UK at its Ellesmere Port car plant in Cheshire.
