Nissan ‘would focus on UK at expense of EU’

Car giant in secret plan to close EU factories and focus on UK

NISSAN is plotting to pull out of Europe and ramp up manufacturing in the UK if Brexit leads to tariffs on car imports, it has been claimed.

The Japanese car giant is reported to have contingency plans to stop manufacturing in France and shut its struggling van plant in Barcelona.

As part of the strategy, said to have been drawn up late last year, bosses believe they could increase their market share in the UK five-fold, selling one in every five cars.

Nissan believes focusing on the UK could give it the edge on its rivals, such as Ford and Volkswagen, which would be hit by tariffs on UK imports, making their cars more expensive.

But Nissan, which previously threatened to shut its Sunderland plant if the UK leaves the EU without a deal, said: ‘We deny such a contingency plan exists.’

When Boris Johnson embarks upon post-Brexit trade negotiations in Brussels, his advisers may wish to slip a copy of Monday’s Financial Times into his briefing notes.

The stridently pro-eU newspaper carried a front-page story that will have tickled the Prime Minister and his team.

It claimed that nissan has drawn up contingency plans to pull out of mainland europe and boost manufacturing in the UK if Brexit leads to tariffs on car exports.

According to the report – which has been categorically denied by the Japanese car maker – the plan would see nissan close its ailing Barcelona van plant and stop manufacturing in France.

Meanwhile, it would dramatically beef up production in the UK at its giant Sunderland plant.

Under the plans – said to have been drawn up late last year – bosses believe they could eventually sell one in five cars in the UK – increasing their market share from 4pc to 20pc.

The Micra, which is currently produced at a Renault plant in France as part of the Renault-nissan alliance, would be moved back to the UK. And the firm would also weigh up whether to produce its X-Trail model in Sunderland. The rationale for this plan – if it exists – is fairly simple. If Johnson fails to secure the Canada- style free-trade deal with the EU that he is seeking, the UK could revert to World Trade Organisation rules.

This would mean swingeing tariffs of 10pc on cars sold from the UK to the EU and vice versa, as well as taxes on car parts.

The punitive regime would give nissan the edge over car makers that import to Britain, such as Volkswagen, BMW and Ford.

The premise behind the contingency plans could not be more at odds with nissan’s public position on Brexit. The group has previously warned that it may be forced to shut its plant in Sunderland – employing around 6,000 – if Britain leaves the EU without a deal.

It has also warned it may have to pull the plug on manufacturing in europe if tariffs are imposed.

The firm stuck to this mantra yesterday, saying: ‘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.’

But nissan would not be the first company to hold a different position in public than it does behind closed doors. There is no doubt that the

UK car manufacturing industry has the spare capacity to ramp up production.

Industry figures from the Society of Motor Manufacturers and Traders show production slumped last year to the lowest level since 2010.

nissan has invested more than £4bn in its Sunderland site, which produces the Qashqai, Juke and electric models and is its most efficient plant outside of Japan.

But industry experts have expressed doubts that nissan sees Brexit as a big opportunity to expand in the UK. david Bailey of the Birmingham Business School said: ‘Overall, I’m a bit sceptical. In the event of a hard Brexit we will probably see production shift both ways.

‘There will be some shift from the EU to the UK. But this will be outweighed by the scale of the shift from the UK to the EU, as the EU is a bigger market.’

As for claims that nissan believes it can sell one in five cars in the UK, Bailey said: ‘That’s a bit of a moon shot – it seems a huge leap.’