United Kingdom promised Nissan 80 million pounds of support for 2016 auto investment

United Kingdom promised Nissan 80 million pounds of support for 2016 auto investment

But that was based on Nissan building its new model in the country. However, as production ramps up over the years and older models are phased out, jobs invariably move to the alternate facility and the original factory suffers, experts have warned.

In a letter to staff, Nissan chairman Gianluca de Ficchy said uncertainty over the UK's relationship with the European Union after Brexit was not helping companies with long-term planning.Judith Doyle said the Government needed to let businesses know where they stood.

The company said it instead plans to consolidate production of the next generation X-Trail at its plant in Kyushu, Japan, where the model is now produced.

The automaker's decision is a blow to the government, which in 2016 offered Nissan incentives to stay in Britain.

"We recognize that the United Kingdom has a stake, and we are backing your continued success in Sunderland to the hilt", Clark wrote.

Some commentators argue that the recent sacking of disgraced Nissan boss Carlos Ghosn likely also prompted the decision. It cut hundreds of jobs at its Sunderland factory in the north of England, Britain's biggest auto plant, past year as output slumped 11 percent, hit by levies and crackdowns on diesel.

Meeting with Prime Minister Theresa May at the time, a deal for new investments, in exchange for state support for R&D, has already been concluded.

Sunderland City Council leader Coun Graeme Miller said: "While this decision is not expected to have an immediate impact on jobs at Nissan, anything that affects longer term investment in the plant is obviously a cause for concern".

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In the letter - which the government refused to publish on multiple occasions - Clark says that the vehicle maker would be a "critical priority" in the Brexit talks.

The backstop would kick in if Britain and the European Union have not agreed a trade deal on their future relationship after a limited transition period of up to two years.

"The ongoing backlash against diesel. has affected not just Nissan but other companies here, and that's exacerbated the other problems faced by the industry as a whole", Wells added.

Carmakers are particularly concerned about Brexit because they rely on complex supply chains of parts from multiple countries.

The government said that Nissan had not received any of the funds so far and would have to reapply for them.

Nissan said in a statement that it had "accepted a formal offer from the UK Government in June 2018" that provided grant support to "a number of different projects in our Sunderland plant".

The British vehicle industry has already seen a dramatic drop in investment since the vote, and business leaders have warned of further blows to the sector after the UK's withdrawal.

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