Nissan wants the UK to promise compensation for any eventual tax barriers imposed due to the planned ‘Brexit’ European Union exit before it makes new investment in its Sunderland car plant, chief executive Carlos Ghosn told Reuters.
Nissan, which builds around one in three of all of Britain’s total car output at its Sunderland facility, was due to decide early next year on where to build its next Qashqai sport utility vehicle, the news agency reported.
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“If I need to make an investment in the next few months and I can’t wait until the end of Brexit, then I have to make a deal with the UK government,” Ghosn told Reuters at the Paris show.
“You can have commitments of compensation in case you have something negative,” he said. “If there are tax barriers being established on cars, you have to have a commitment for carmakers who export to Europe that there is some kind of compensation.”
Britain is expected to trigger formal divorce talks from the European Union early next year, with talks expected to last two years, though it is unclear whether Britain will have full access to EU markets when it leaves.
The British government has said it would get the right deal out of Brexit but some investors, especially those which export much of their finished products to the continent, are worried they may have to pay tariffs to sell their goods into EU markets once Britain leaves.
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By GlobalDataTrade minister Liam Fox on Thursday signalled Britain would leave the EU single market after pledging the UK would become a “newly independent member” of the World Trade Organisation, according to the Daily Telegraph.
He said Britain would be in a “a prime position to be a global leader in free trade” and that those who thought the country would “turn inwards” after Brexit have been proved to be “100% wrong”.
He also warned EU leaders they must negotiate a free trade deal with the UK post-Brexit or European citizens would suffer the consequences.
The UK is unable to strike free trade agreements with other countries because it is part of the EU’s ‘customs union’ which imposes common tariffs across the bloc. According to the Telegraph, he said free trade was “not a zero-sum game, it really can be win-win. The EU / Korea free trade agreement (FTA), which came into effect in July 2011, is just one example. In the year before the FTA was agreed, the UK sold just over 2,000 cars to South Korea. In 2014 that number reached over 13,000.”
Reuters noted Britain’s overwhelmingly foreign-owned car industry was a strong supporter of continued membership of the EU bloc during the referendum campaign and has voiced concern about future production conduct without unfettered access to the single market.
Reports in 2008 said Nissan Motor was granted GBP6.2m (US$12m) by the British government to build the new compact sport utility vehicle that was launched as the Qashqai at its Sunderland plant from 2010.
The grant covered just under half of the EUR17m ($26m) required for the changes at the Sunderland factory, a Nissan spokesman told Reuters in Tokyo. Reports at the time noted that Ghosn had for years lamented Britain’s refusal to join the euro zone and had recently stepped up that rhetoric after the pound fell 15% against the euro and yen over the past year.
Nissan had said earlier it would source and build its new entry-level subcompact cars such as the Micra – then currently built at Sunderland – in five low-cost countries including India and Thailand.
The automaker unveiled a redesigned Micra in Paris today and said earlier it would be built in Flins, France.
