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Nissan Brexits Early


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The automaker has reversed its decision to build its X-Trail SUV at a plant in northern England and instead will produce it in Japan (the model's global hub). British Prime Minister Theresa May must be kicking herself for not insisting on "no take backs" language in the contract.

So what's the reasoning? Seems like an entrée of consolidating production with a side of Brexit concerns.

  • "While we have taken this decision for business reasons, the continued uncertainty around the UK's future relationship with the EU is not helping companies like ours to plan for the future," said Nissan's Europe chairman.

Why this is extra painful: Nissan said it would make the model in the UK only four months after the tumultuous Brexit vote in 2016. The investment pledge signaled that things might turn out okay.

But they're not turning out okay

UK companies across industries are preparing for Brexit like it's the asteroid from Armageddon. Fine, that may be over-the-top, but still...

  • British factories stockpiled goods in January at a rate not seen since the early 1990s as they brace for impact. It was the highest level ever seen in a G7 country.
  • A new survey from a lobby group showed that nearly 30% of British firms are either considering, or actively planning on, moving ops out of town.

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Via the Guardian

But there's more to this Nissan story than Brexit

Lower demand for diesel vehicles in Europe is stinging carmakers...and Nissan's suffering the most. Last year, it cut hundreds of jobs at its northern England plant while watching European sales (down 14% in 2018) fall belowthat of Kia, Citroën, and Dacia brands. *Quickly Googles Dacia*. Okay that's not good.

Zoom out: The UK auto industry is struggling from both Brexit and non-Brexit related factors. Investment dropped 46% and new car production fell 9.1% in 2018, according to an industry trade group.

https://morningbrew.cmail20.com/t/j-l-xjyuklk-yhyuhjkhdk-d/

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