Diesel, Brexit blamed as Nissan scraps plan to build X-Trail in Sunderland

Nissan has cancelled plans to build the next-generation Nissan X-Trail at its Sunderland factory, blaming the diesel sales downturn and Brexit uncertainty.

The Japanese firm announced plans to build the next generation of both the X-Trail and Qashqai SUVs at the plant in 2016, securing the future of the plant that employs around 6700 people. It did not announce how many additional jobs would have been created by the addition of the X-Trail line - beyond describing it as "hundreds" - but the decision not to go ahead with the plan is not believed to affect the current workforce at the plant, instead impacting potential future employment opportunities there. Supply chain investments will also be impacted.

Responding to the news, Business Secretary Greg Clark said that Nissan would need to reapply for nearly £60 million of taxpayer support that was offered in 2016 in return for the firm building the next-generation X-Trail, Qashqai and Juke in Sunderland.

Nissan also confirmed in its statement that future production of the Nissan Qashqai and Nissan Juke would remain at Sunderland, including next-generation models of those cars.

Citing the need to invest in future powertrain technology relevant to the Euopean market, Nissan chairman Gianluca de Ficchy said: “Nissan is investing heavily in new technologies and powertrains for the next generation of vehicles in our Sunderland plant. To support this we are taking advantage of our global assets, and with X-Trail already manufactured in Japan, we can reduce our upfront investment costs.

“We appreciate this will be disappointing for our UK team and partners. Our workforce in Sunderland has our full confidence, and will continue to benefit from the investment planned for Juke and Qashqai.”

“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.”

Nissan Executive Vice President for Manufacturing and Supply Chain Management, Hideyuki Sakamoto, added: “A model like X-Trail is manufactured in multiple locations globally, and can therefore be re-evaluated based on changes to the business environment. As always, Nissan has to make optimal use of its global investments for the benefits of its customers.”

Doubts about the future of the Sunderland plant, which currently produces the Juke, Qashqai, X-Trail and Nissan Leaf, along with the Infiniti Q30 and QX30, were raised after Britain voted to leave the European Union in 2016.

Nissan eventually committed to the plant’s future after then-chairman Carlos Ghosn struck a deal with the UK Government after a meeting with Theresa May in 2016. Speaking in the House of Commons following the announcement, Clark revealed the Government had pleaged nearly £60 million of taxpayer support to the firm, of which Nissan has so far received £2.6 million. The firm will be required to reapply for the rest.