Nissan confirms Sunderland will stay open due to Brexit deal
The uncertainty surrounding the plant’s future has been resolved – but Nissan will make changes to keep the plant profitable
Nissan has confirmed that its Sunderland production facility will remain operational, thanks to the trade deal reached between the UK and the EU.
However, Nissan plans to make some changes to take advantage of the deal’s terms; currently, UK car manufacturers can continue to sell vehicles to the EU tariff-free, providing at least 55 percent of the car’s components are sourced from either market.
So, to qualify for this clause on as many vehicles as possible, Nissan will move production of the 62kWh Leaf to Sunderland in the coming months and shuffle the EVs battery assembly facility closer to home in the process. It’s an important move for Nissan as around 70 percent of the cars built at Sunderland are exported – most of them to the EU.
Sunderland will also start production of the next-generation Qashqai in the next few months – and there’s a chance the brand may expand its operations to produce the new X-Trail and Ariya EV, although nothing has been confirmed yet.
The Brexit deal will certainly come as a relief to Nissan’s financial department, as the firm finished the previous financial year with a net loss of 671.2 billion yen (£5.08 billion) and an operating loss of 40.5 billion yen (£306.7 million). The promise of tariff-free trading means the brand should be able to clear those losses more quickly, once the pandemic is dealt with.
To fight the fire, Nissan announced a set of recovery plans last year, which include reducing production capacity by 20 percent to 5.4 million units per year. As part of the cutbacks, Nissan has also closed its plant in Indonesia – and its production facility in Barcelona is due to close later this year, with the brand focussing instead on Thailand for the south-east Asian market and Sunderland for the European market.
The plans also include increasing every factory’s utilisation rate – which represents a plant’s actual output as a percentage of its maximum capacity – to 80 per cent. There are also plans to increase the brand’s presence in the electric car market, as well as for members of the Renault-Nissan-Mitsubishi Alliance to “share resources, including production, models and technologies.”
Makoto Uchida, CEO of Nissan, said: "Our transformation plan aims to ensure steady growth instead of excessive sales expansion. We will now concentrate on our core competencies and enhancing the quality of our business, while maintaining financial discipline and focusing on net revenue per unit to achieve profitability. This coincides with the restoration of a culture defined by ‘Nissan-ness’ for a new era.
“Nissan must deliver value for customers around the world. To do this, we must make breakthroughs in the products, technologies and markets where we are competitive. This is Nissan's DNA. In this new era, Nissan remains people-focused, to deliver technologies for all people and to continue addressing challenges as only Nissan can.”
A total of 12 new cars are due to arrive this year, with some heading to Europe – although Nissan will prioritise growth in North America, China and Japan. The company will also focus on C and D-segment family cars, electric vehicles and sports cars. So far, we know about the new X-Trail, Qashqai, pure-electric Ariya SUV and the new 400Z coupe.
B-segment vehicles weren’t mentioned in the plan, which calls the future of the Micra supermini into question beyond its current generation. Overall, the company’s product portfolio also will shrink by 20 per cent, from 69 models at present to fewer than 55.
Beyond Europe, the firm will leave the South Korean market and will remove the budget Datsun sub-brand from Russia.
Expanding the company’s electric and hybrid vehicle line-up is another essential aspect of the plan. Nissan expects to sell one million electrified cars a year by 2023. In its home Japanese market, it will launch two additional electric vehicles and four more e-POWER hybrid models, with the aim of turning Japanese sales 60 per cent electrified.