Despite warning that Brexit could harm its manufacturing operations in Great Britain, Nissan is pushing ahead with production of its new Qashqai small SUV at its Sunderland, England plant with a $67.8 million investment.
The Sunderland plant is the largest in Britain, putting out more than 350,000 vehicles last year. The Qashqai is a new small ute, better known as the Rogue Sport in the U.S.
Despite the Japanese automaker’s warnings about the potential impact of Brexit, which is ongoing, Nissan’s moving forward with a new press line for the SUV at the plant in northern England, which also builds the Juke and Leaf.
As the initial deadline for Brexit neared last year, Nissan – and several other automakers – warned that it could limit its ability to remain viable. Automakers were concerned about the expected rise in additional customs checks, tariffs and regulations, which increase their costs, slow manufacturing, bringing their ability to build and move vehicles to a halt.
The fall deadline was pushed back, and Great Britain formally exited the European Union in January. However, Britain’s trading terms with Europe will remain status quo until the end of the year while the talks between Great Britain and the bloc continue to determine the new rules.
Nissan has been investing steadily in the plant for some time now. The company committed to building the Qashqai in 2016, which an eye toward the long term.
The automaker committed to building the new Juke there in 2015 — a year before the country voted to leave the European Union. The plant, which exports 70% of its output to Europe, got a $100 million upgrade to build the new ute.
“If we are in a situation in which tomorrow we will have to apply 10% export duties to 70% of our production, the entire business model of Nissan in Europe will be in jeopardy,” Nissan’s European Chairman Gianluca de Ficchy said last fall.
“If there will be a no-deal – and a no-deal will be associated with WTO tariffs application – that won’t be sustainable for us.” He added that the company essentially wants no tariffs to be imposed in the event of a no-deal option.
The investment comes as Nissan wrestles with substantial financial issues, causing it to enact cost-cutting measures as it attempted to rebuild its profitability and repair its relationship with its partners, Renault and Mitsubishi.