Nissan has urged UK and EU Brexit negotiators to find a way to maintain its operations in Sunderland, as reports emerged that the firm has asked the Government to cover the multimillion-pound cost of tariffs that could emerge for exported cars.
Reports from Japan say that both Nissan and fellow automotive giant Toyota have told UK Ministers they will have to cover additional tariffs that could arise if the country cannot conclude a free-trade agreement with the EU.
Tariffs on cars exported to Europe will rise to 10% if a Brexit deal cannot be agreed, making cars exported to Europe - the main market for cars made at the Sunderland plant - unprofitable.
Nissan has not directly commented on the reports, but has released a statement that says it is “still waiting for clarity” on future trading arrangements and repeating calls for a deal to be reached.
Unions and business groups have expressed concerns that a deadline for a Brexit deal is fast approaching, while the UK’s chief negotiator has admitted that moves to help the automotive sector avoid some tariffs had failed.
A Nissan spokesman said: “Since 1986, the UK has been a production base for Nissan in Europe. Our British-based R&D 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 the current arrangements 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.”
Automotive group the Socity of Motor Manufacturers and Traders has estimated that increased tariffs could cost UK car makers an additional £4.5bn a year, which they would find impossible to absorb.
Executives from Nissan, Vauxhall and Jaguar Land Rover have all warned that such costs would threaten the future of the UK car industry, while Honda last year announced the closure of its UK manufacturing operations.
But it would prove very difficult for the Government to bail out the automotive sector, having turned down similar pleas from many other parts of the economy, including aerospace and hospitality industries.
Demand for new cars fell to a 21-year low last month, with the weakest September performance since 1999 when new number plates began being issued twice per year.
Brexit negotiations are due to start up again at the end of the week after a meeting between Prime Minister Boris Johnson and EU president Ursula von der Leyen at the weekend led to an agreement to “work intensively” to resolve differences in trade talks.
