Brexit has given the world a lot of concerns, especially international businesses. Nissan, the Japanese based car manufacturer, has stated its grave worries in light of a genuine chance of a no-deal Brexit. Their chairman has noted that the possible 10% tariffs on the export of Nissan vehicles from the UK to Europe as a whole, would make their European business model unsustainable.
The car manufacturing giant has had a relatively tough year, and the Brexit debacle is something that will severely affect their business model, going forward.
Gianluca de Ficchy, European chairman for Nissan, stated that Nissan had full intention of going forward with vehicle production in their Sunderland facility. Their Juke model is due to begin manufacturing shortly.
Nissan, like other vehicle companies, works with a “just-in-time” manufacturing plan. This means that they meticulously plan every aspect of component manufacturing within the EU. All of this is done in order to ship the parts to the Sunderland plant at the exact time it’s needed. This dramatically optimizes costs within a car’s manufacturing process. With the Brexit threat looming, the Japanese car manufacturer will, at the very least, have to redo its timetable. At worst, it will have to scale down to compensate for tariffs enacted on two-thirds of the parts they import from Europe to make the new Juke model.
With over £100 million in funds pumped into the UK to help facilitate the manufacturing of three car models within the Sunderland plant: The Qashqai, the Electric Leaf, and the new Juke model. Of all the cars built, 70% of it is due to get shipped to the European continent.
Even with this gloom and doom, Nissan has assured the general public that they are prepared for whatever outcome they anticipate for Brexit. However, Nissan has made it clear that they don’t appreciate the lack of clarity over the eventual outcome of Brexit.
Nissan, one of several car manufacturers with plants in the UK, has recently stopped doing nightshifts within the Sunderland plant. However, they state that the particular move wasn’t because of Brexit, it was just general optimization of the plant’s operations.
Nissan alone has 6000 UK workers under their direct employ. However, the far-reaching effects of Nissan’s car assembly have led to 35 000 jobs being supported by the company within the UK alone.
Nissan isn’t the only company hosting its concerns about Brexit. The entire event will put several international companies in an awkward position, especially if the WTO tariffs come in effect, and their profit margins are slashed by 10%.
Everyone involved hopes that a no-deal Brexit simply won’t happen, but as it seems, that’s a genuine possibility.