Saturday , May 25 2024

The EU, not Brexit, drove Nissan’s decision to produce its new car in Japan

Predictably, Remainers blamed Brexit for Nissan’s decision not to produce its new X-Trail vehicle in its Sunderland plant: Nissan chooses Japan over UK to build new X-Trail car.

But scrutinise this allegation just a little, and you’ll find that it doesn’t hold water.

Given that Japan and EU has just concluded a trade deal, Nissan does not need to produce its vehicles within the EU to avoid the EU’s protectionist external tariffs. Thus there is now no benefit for Nissan to manufacture the same vehicle in two different sites. This would save in enormous capital costs of investing in the duplicate machinery and personnel.

Europe’s biggest markets have just implemented policies to discourage the sale and ownership of diesel vehicles:

Commenting on its decision, Nissan also said that since 2016 “the environment for the car industry in Europe has changed dramatically”, including “changing emissions regulations”.

In the UK, diesel cars that fail to meet the latest emissions standards now face a levy and a number of European countries, including the UK, have announced bans on both new diesel and petrol vehicles in the future.

This means that it makes sense for Nissan to shift the focus of its new diesel vehicle away from the European market.

Strategically, Japan is also better-placed to reach both of the world’s largest economies: the USA and China. The EU’s trade agreement with Japan took away any reservations Nissan had to retain production in the EU. Brexit was just an offhand mention.

In all fairness, Nissan’s Europe chairman said only that Brexit was “not helping” them plan for the future.

In other words, even if the UK was to remain a member of the EU, there would be no advantage to Nissan producing its new X-trail in the UK.

What does this mean? Politicians are lying again, quelle surprise. And all those Remainers who back this argument are propagating a lie, whether or not they do so knowingly.

This post was originally published by the author on his personal blog:

About Hoong-Wai

Software analyst. Engineering graduate. A social progressive at heart, and a former atheist. Believes in protecting life and liberty. Recently developed a strong interest in economics despite having given up the subject many moons ago. UKIP parliamentary candidate for 2017. Emigrated from Malaysia to the UK in 1998.

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One comment

  1. I saw a couple of Sunderland Nissan employees say something similar, that it had nothing to do with Brexit and was mostly about the Deisel emissions.