UK offers carmakers Brexit reassurance as new warnings emerge

October 18, 2016

A meeting between UK prime minister Theresa May and Nissan chief executive Carlos Ghosn reflected the state of uncertainty Brexit has placed on the automotive industry as many words were exchanged, but nothing was saidMay provided reassurances to Nissan about its future after Brexit, saying that trading conditions for its Sunderland plant will not change after Britain’s exit from the EU, even though negotiations with the EU will not start before the UK government triggers the formal leaving process before the end of March 2017. In his carefully worded response, Ghosn said he was ‘confident the government will continue to ensure the UK remains a competitive place to do business’, which keeps all options open after his warning last month that the loss of tariff-free trade could threaten UK manufacturing operations. OEMs including Jaguar Land Rover have said that any offers from the UK government must benefit all carmakers equally to ensure there is a level playing field. Those negotiations are months or even years away and, in the meantime, manufacturers must decide where to base manufacturing for new models, including a decision this year on the home for the new Nissan Juke. Matthias Wissmann, president of Germany's Verband der Automobilindustrie, told the Financial Times yesterday that parts of the UK's car industry could move to central and eastern Europe if the country loses access to the single market in its divorce negotiations with the EU. He said: 'If there's a "hard Brexit" then we will see a shift to central and south-eastern Europe. Countries such as Slovakia and Poland are very attractive, have low labour costs and are part of the EU.’ Although German OEMs exported more than 800,000 cars to the UK last year, Wissmann, a former transport minister and powerful lobbyist, said: ‘The UK is an important market for us, but the EU market is much more important. If the EU were to fall apart, that would be a lot worse for our industry.’

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