LONDON (Reuters) - Carmaker Nissan has scrapped plans to build its new X-Trail SUV in Britain and will produce it solely in Japan, warning two months before Brexit that uncertainty over Britain’s departure was making it harder to plan for the future.
Falling demand for diesel cars in Europe has forced Nissan to invest in other technologies and save costs. It cut hundreds of jobs at its Sunderland factory in the north of England, Britain’s biggest car plant, last year as output slumped 11 percent, hit by levies and crackdowns on diesel.
“Nissan has increased its investments in new powertrains and technology for its future European vehicles,” the firm said. “Therefore the company has decided to optimize its investments in Europe by consolidating X-Trail production in Kyushu.”
“While we have taken this decision for business reasons, the continued uncertainty around the UK’s future relationship with the EU is not helping companies like ours to plan for the future,” said Europe Chairman Gianluca de Ficchy.
Britain’s business minister Greg Clark described the announcement as a “blow to the sector and the region.”
Britain is due to leave the European Union on March 29. Lawmakers last month rejected Prime Minister Theresa May’s Brexit deal, heightening fears of a disorderly no-deal Brexit and of new trade barriers. May said on Sunday she would seek a “pragmatic solution”.
“We have a task force in place, reporting to me, that is considering all of the possible scenarios and the potential impact on the business,” de Ficchy said in a letter to workers.
Nissan builds roughly 30 percent of the country’s 1.52 million cars and exports the vast majority
