Carlos Ghosn, CEO of Nissan, leaves 10 Downing Street after meeting Britain's Prime Minister Theresa May in London, Britain, October 14, 2016. REUTERS/Hannah McKay
Nissan chief executive Carlos Ghosn leaves Downing Street on Friday after talks with Theresa May © Reuters

Nissan has been given assurances by Theresa May that trading conditions for its Sunderland car plant will not change after Britain’s exit from the EU, in the first suggestion that the government could pick favoured sectors to shield from the impact of Brexit.

After meeting Mrs May in Downing Street on Friday, Carlos Ghosn, the Japanese carmaker’s chief executive, said he was “confident” the UK government would provide conditions that allow the company to invest in Britain.

Mr Ghosn met the prime minister ahead of the carmaker’s decision on whether to build its new Qashqai SUV in Sunderland, which could be taken as early as next month, according to two people familiar with the timetable. Nissan has previously said it will not invest any further unless the government offered assurances that it would not face greater tariffs, or that it be compensated otherwise.

Mrs May’s move to reassure Nissan, which is partnered with Renault, suggests that the UK could negotiate EU access for certain sectors. Ministers are looking at whether industries with complex supply chains might be given a carve out and remain in the customs union — if Britain left it.

In order to achieve this, the government will have to find a way to provide support without being in breach of EU rules around “state aid”.

Sunderland exports 76 per cent of its cars to the EU, and has been described by Mr Ghosn in the past as a “European plant based in the UK”.

On Friday, he said: “Following our productive meeting, I am confident the government will continue to ensure the UK remains a competitive place to do business.”

Nissan’s concerns around trading barriers extend not only to the export of its cars from the site but access to a European supply chain as well as international talent.

Specifics on what form the government support might take were not discussed at the meeting, which was attended by several senior officials from government including Jeremy Heywood, the cabinet secretary, and Greg Clark, the business secretary.

Two other Nissan executives also attended the meeting.

“It is not a done deal,” said one person close to the talks. “But it was a very positive meeting.”

In a statement released after the meeting, Mrs May said: “This government is committed to creating and supporting the right conditions for the automotive industry to go from strength to strength in the UK, now and into the future.

“That’s why I was pleased to have met with Mr Ghosn today to discuss our shared belief that Britain remains an outward-looking, world-leading nation in which to do business. We will continue to work with Nissan as we develop the environment for competitiveness of the automotive industry here in the UK to ensure its success.”

If the government agrees to offer compensation for tariffs, other carmakers in the UK are likely to demand similar terms.

Honda, Toyota and Vauxhall all operate plants in the UK that are heavily reliant on exports to the EU, while Ford and BMW make engines that are assembled into vehicles in continental plants.

The car industry in the UK supports 800,000 jobs, including 169,000 manufacturing roles at plants and in the supply chain. Some 80 per cent of the cars made in the UK are exported.

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