Nissan has committed to UK production after the British European Union referendum resulted in a decision to leave the 28-strong club

Nissan has committed to UK production after the British European Union referendum resulted in a decision to leave the 28-strong club

UK trade body, Society of Motor Manufacturers and Traders (SMMT) says there would not have been guarantees made to Nissan ahead of its dramatic announcement last week (27 October) it was to continue significant investment into its Sunderland plant. 

Much speculation has centred on whether or not the British government struck any sort of deal with the Japanese automaker to convince it in a post-Brexit landscape to commit to future manufacturing at the factory, but the UK association believes this not to be the case.

"There won't have been a guarantee because you can't guarantee such commitments with such uncertainty," said SMMT chief executive, Mike Hawes at this week's Open Forum in Birmingham, while welcoming Nissan's committment to future investment in its Sunderland plant as "tremendously good news," and hailing the British government's pledge to being internationally competitive as critical.

"That is exactly what we wanted the government to say," added Hawes, who noted the sector could approach a post-Brexit industrial environment with significant confidence given its robust health. 

Uncertainty following Britain's decision to leave the European Union (EU) has put pressure on Sterling – although this in turn may trigger some short term opportunities for the domestic supply chain and exports – but years of outperforming far weaker Continental economies has left the UK auto landscape in a strong position.

"We would not expect a massive change just because the UK voted in a different way to the one we wanted," said Hawes. "Any immediate decisions, we would not necessarily see the impact very quickly.

"The automotive sector has a tremendously strong record of success in recent years. Our impact on the international stage means we approach this period of uncertainty in relatively good health. This year we will see figures up just under 10% - this is the result of investment decisions bearing fruit. Customer confidence has sustained that increase and as we work through that pent-up demand from the recession is one of the main reasons we have been successful and profitable.

"Our message to government is whatever decisions are taken now, you will not see until we are potentially out of Europe. We are now in more uncertain times and the pound has fallen - it is likely prices will have to go up. One of the real strengths of the sector has been in productivity which is at a 16-year high.

"That is a result of investment and also a commitment by the workforce and flexibility of the workforce. Investment in the supply chain and OEM [s] – this continual investment is something we want to sustain."