Nissan £61m in doubt after investment U-turn

Nissan cancels plans to make X-Trail SUV in the UK

In a letter to Sunderland employees, Nissan said the relentless "uncertainty" engendered by Brexit is not helping it to plan for the future.

The Government has made bolstering manufacturing linked to Nissan in Sunderland a priority, offering the company £80m in the wake of the Brexit vote in 2016 to safeguard the vehicle maker's investments in the north east.

Nissan has confirmed that no jobs will be lost at the plant, but anticipated future roles required if the X-Trail were to be made in Sunderland are likely to not be created.

"We recognize that the United Kingdom has a stake, and we are backing your continued success in Sunderland to the hilt", Clark wrote in the letter.

The British government says that if Nissan wants their financial support, the company will have to reapply based on a new investment strategy. Nissan's plant in Sunderland, England, which employs 7,000 workers, will continue to make Nissan's Juke and Qashqai models.

"I think that is a serious signal to all of us in parliament that now is the time to resolve that uncertainty so it doesn't impinge on any decisions in the future", business minister Greg Clark told the BBC TV.

Clark said in the 2016 letter that government had already been able to confirm £22m of support for the foundry at Sunderland to become a European development centre for the firm's alliance with fellow carmakers Renault and Mitsubishi.

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The backstop would kick in if Britain and the European Union have not agreed a trade deal on their future relationship after a limited transition period of up to two years. In a bid to perform damage limitation, the government has insisted that Nissan's decision will not result in any job losses at the plant (but this is unsurprising as it is a planned expansion that has been cancelled).

Nissangate continues with the news that as previously suspected, the government had offered Nissan a huge pile of cash to manufacture its new vehicle in the UK.

The firm will still build its new Juke and Qashqai models at the factory which opened in 1986 after then prime minister Margaret Thatcher successfully encouraged Japanese companies to pick the country as a gateway into Europe.

"Although Nissan says it has taken the move to consolidate and produce the X-Trail in Japan for business reasons, it has also pointed to the continued uncertainty around the UK's future relationship with the European Union as not being helpful".

The British auto industry has already seen a dramatic drop in investment since the vote, and business leaders have warned of further blows to the sector after the UK's withdrawal.

The latest blow from Nissan comes weeks after Britain's biggest carmaker, Jaguar Land Rover, announced it would reduce its global workforce by 4,500.

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