4 February 2019

Brexit - a flag of convenience for Nissan?

With the news that Nissan is cancelling its plans to build its new X-Trail SUV in the UK’s Sunderland plant, the media has been full of reporting that uncertainty over Brexit and falling global sales are to blame. This seems somewhat unlikely as the X-Trail is now destined to be made in Japan, at a much higher cost to the Japanese carmaker.

I have written about this before but in the light of this news I think it needs to be reiterated: under WTO rules, carmakers around the world maintain highly efficient just-in-time supply chains for their inbound and outbound activities.

The Japanese automotive industry imports a great number of modules and components from China and indeed, many of the parts for the new X-Trail will come from China, Taiwan, South Korea and also from Europe. We are not hearing of disastrous delays at borders or excessive tariffs making these trade relations untenable.

No, at the root of this decision must be the Nissan board members’ intentions to bring Nissan back to Japan as a whole, to turn their back on Sunderland and the tremendously successful and hard-working plant employees, and the supply chain in the UK and Europe.

For, as Carlos Ghosn languishes in a Tokyo jail cell, the board of Nissan is trying to engineer the dismantling of the Renault-Nissan-Mitsubishi Alliance. Now that Nissan is the most profitable and successful business unit in the partnership, so the Nissan board want to wrest the company back from its French parent, who invested so heavily and worked so hard to help what was a fairly crippled company with terrible debt and no significant new product pipeline back on its feet.

And Brexit is the perfect smokescreen to use to fool the British people, and the industry. Witness Toyota recently investing in the UK, bringing a new model to the region, stating that the UK workforce is better value and more efficient than elsewhere in Europe, or the rest of the world, especially when considering that the UK market is healthier than many other European or global sales locations. The UK will survive Brexit, if it actually happens, and the will and determination of our supply chain and logistics experts can streamline routes, customs clearance and border crossings to work as efficiently as Japan or China, under WTO rules.

I would be fascinated to know Carlos Ghosn’s take on this latest attempt to undo the sterling work he has put in to create the world’s largest automotive manufacturer. I have a feeling that if he was still at the helm, this disastrous and short-sighted decision would not have been taken.

Simon Duval Smith

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