Nissan has cancelled its plans to build the next generation Nissan X-Trail in the UK. The Japanese car manufacturer is citing Brexit as their primary motivation to make this decision. The latest version of this popular SUV crossover will now be made exclusively in Japan. Let’s take a closer look at what we know so far.
The Continuing Brexit “Uncertainty”
The Nissan plant in Sunderland, UK has been the production hub for Nissan cars for many years now. Nissan has stated that the “uncertainty” surrounding the withdrawal from the European Union has guided its decision. Industry insiders that broke the story have also reported that the next generation X-Trail model will be built entirely in Japan. This will make Japan the global production hub for Nissan’s top selling SUV crossover range.
The Nissan Europe Position
Gianluca de Ficchy is the Nissan Europe chairman; he stated “We have taken this decision for business reasons,” he added, “the continued uncertainty around the UK’s future relationship with the European Union (EU) is not helping companies like ours to plan for the future.”
The Nissan plant in Sunderland in the largest UK vehicle factory and it produces approximately 30% of the 1.52 million unit vehicles built there. Most of the cars produced are built for export to the European market, so it should come as no surprise that Nissan is concerned.
Despite this obvious blow to the Sunderland plant, Nissan will still be making the next generation Qashqai and Juke at this UK production facility. This Nissan car plant also makes the Nissan Leaf and the Infiniti Q30 and the Q30X.
The EU and Japan Free Trade Agreement
This announcement was made only days after a new free trade agreement between the EU and Japan came into force. This trade agreement has removed the 10% import tariff that previously existed to bring Japanese cars into Europe.
Obviously, this is not a coincidence, and Nissan is making moves to protect their position as a market leader in Europe. The recent sales of the current generation X-Trail have taken a hit in the past year with a fall in sales of 31% for a total of 47,923 units sold. This is despite the Nissan X-Trail price offering a fantastic value proposition for the buyer.
This drop in sales isn’t too unusual for a vehicle that has a new generation on the horizon; some buyers will always wait to get the latest model. But, the removal of the import tariff allows Nissan to make their cars in Japan and export them to EU countries without paying the 10% tariff.