Nissan: Brexit is a sideshow

As Nissan decides to build its new X-Trail model in Japan rather than Sunderland, Dr Jonathan Owens, Lecturer in Operations Management at the University of Salford Business School, and expert in supply chains, says there is more to the decision than Brexit.

Dr Owens said: “Just four months after the 2016 referendum, Nissan said it would build its next-generation Qashqai sports utility vehicle and a new X-Trail model in Sunderland. It still has plans to build the next generation Qashqai sports at the Sunderland Plant, but not the X-Trail which will be manufactured in Japan.

“This announcement is more bad news for the British car manufacturing business, and no doubt this will be zealously linked to the uncertainty surrounding Brexit. However, we should acknowledge the global falling consumer demand for both diesel and petrol vehicles, this coupled to Nissan’s weak sales performances in Europe also played a big part in this decision.

“By keeping the production of the X-Trail in Japan clearly would keep upfront investment costs to a minimum. For example, now it is not necessary to develop a new production line, recruit or train a workforce, or develop a new supply routes for this model. Nissan have recognised this decision was a combination of investment needed for emissions regulations and reduced sales forecasts. Therefore, because of these aspects, the X-Trail’s life cycle may well have been already limited.

“Nissan have made big financial investments and technology upgrades to meet its low-carbon commitments. The 60 kWh battery pack for the Nissan Leaf has been talked about for a while now, but it’s expected to hit the market this year, making it an affordable long-range all-electric vehicle. The X-Trail is not on Nissan’s EV agenda just yet, and no car manufacturer anticipated the collapse of Petrol Diesel sales to be quite as quick as it has been.

“Brexit is a sideshow to wider changes in the car industry.”