Filmed by Petros Gioumpasis and Rod Fitzgerald. Produced by Josh de la Mare.
Nissan has decided not to build its latest sports utility vehicle, the X-Trail, at its British plant in Sunderland. The decision, which reverses a pledge the Japanese carmaker made in 2016, couldn't come at a worse time for the UK car industry, which is facing falling production levels and is busy preparing for the possible impact of Brexit. But what's behind Nissan's move? Critics of Brexit have been quick to leap on the timing, suggesting that Nissan pulled out of the model because of worries about leaving the EU, which is the plant's largest export market.
In truth, it's slightly more complicated than that. Nissan in Europe is suffering from falling sales and poor margins, and corporate headquarters in Japan is keen to prioritise investment into more profitable markets. What's more, the vehicle was expected to be largely diesel. That's a market that's in decline sharply across all of Europe. And with production slated to start in about two years' time and running until almost the end of the decade, Nissan felt it wasn't able to guarantee sufficient demand for the vehicle later into the life of the programme.
There are also new emissions rules that come into force in Europe which increase the cost of engineering the car. That meant the company was also looking for other ways to cut costs of the project. The X-Trail is already made in Japan, so to set up an additional line in Britain making the car would have cost the company millions of pounds that it will now save. But for a plant that exports more than half its cars to Europe and ships in components from the continent, the trading relationship with the EU in future was always going to be a critical factor.
The prospect of tariffs and border checks on its cars in future will not have helped Nissan's decision. But from Brexit to diesel to emissions rules, Nissan's decision does show one thing, conditions in the global car industry can sometimes change very quickly. And when that happens, companies need to adapt to survive.