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March 15, 2019

Brexit, Brexit, Brexit – the week

Our review of Subaru's outgoing fourth generation Forester - did it really start the fad for crossovers at launch back in 1997? - and a look at the brand's electrified future was the most-read analysis article this week. But Brexit topped the news.

By Olly Wehring

Our review of Subaru’s outgoing fourth generation Forester – did it really start the fad for crossovers at launch back in 1997? – and a look at the brand’s electrified future was the most-read analysis article this week. But Brexit topped the news.

First, Toyota denied media reports which had suggested it could end UK production as early as 2023 if the country leaves the European Union without a deal on the terms of its departure. The Nikkei had cited Johan van Zyl, CEO of Toyota Motor Europe, as saying: “”If the business environment becomes very, very difficult to operate,” a future withdrawal “should be on the agenda as well”. He also mentioned less drastic options, including scaling back production or investment. A Toyota spokesman told just-auto: “There is no truth to these reports. They appear to be a misrepresentation of comments in an interview with Japanese journalists about the possible long-term impact of an unfavourable Brexit scenario.”

In the event, the British parliament on Thursday night only voted for a further period of uncertainty, kicking the Brexit exit date can down the road by a further three months to the end of June. This just prolongs the unknown for the auto industry which just wants an exit deal to be agreed, whatever the terms, and get on with adapting business to suit. Ahead of the vote, the government published details of the UK’s temporary tariff regime in the event of a ‘no deal’ Brexit. The move followed the Tuesday vote in the House of Commons which rejected prime minister Theresa May’s proposed UK-EU agreement for the terms of the UK’s originally planned departure from the EU on 29 March. The votes left trade arrangements applying on goods traded between Britain and the EU still to be decided, with political disarray in London continuing and multiple Brexit scenarios possible. In a published statement, the government said the temporary tariffs, if applied, were ‘designed to minimise costs to business and consumers while protecting vulnerable industries’. Import tariffs would be removed from a host of imported products but imposed on others to protect vulnerable sectors such as agriculture and automotive. And, so the uncertainty for the autobiz continues.

Britain’s Freight Transport Association (FTA) said the tariff policy in case the UK left the European Union with no deal on 29 March was “long overdue”. It has been urging the British government to provide clarity to the logistics sector for several weeks, noting many products had already left their countries of origin more than two weeks ago.

Nissan Motor premium brand Infiniti’s announcement it was giving up on western Europe was of little surprise – our new and future products analyst Glenn Brooks foresaw this last year. This week, Infiniti announced a restructuring plan “that will focus the brand on its largest growth markets, specifically North America and China, while withdrawing from western Europe”. The restructuring would have no impact on ongoing operations in eastern Europe, the Middle East and, Asia, “which continue to grow”. As part of the plan, Infiniti would electrify its range from 2021 onward, discontinue diesel models and “focus its resources on its biggest opportunities”. The automaker would place more focus on its SUV lineup in North America, launch five new vehicles in China over the next five years, work to improve quality of sales and residual value, and realise more synergies with parent Nissan Motor. There was more bad news for the Sunderland plant here in England as the move also means the end of the QX30 model line produced there alongside regular Nissan models. The plant was supposed to add the next generation X-Trail but canned the idea recently as European demand for diesel dropped, the EU concluded a free trade deal with Japan (so Japanese made cars can be shipped in tariff-free) and post-Brexit uncertainty continued.

Have a nice weekend.

Graeme Roberts, Deputy Editor, just-auto.com

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