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Nissan scraps plan to build new X-Trail model in Britain

Nissan scraps plan to build new X-Trail model in Britain

The X-Trail model was to be made in the United Kingdom, as announced in 2016, after Nissan and the United Kingdom government reached a deal on future investment, which the company said would secure and sustain the factory's 7,000 jobs.

The Japanese auto manufacturer said in 2016 it would be building the new version of the X-Trail SUV at the factory along with its next-generation Qashqai, prompting claims that Nissan and the government had struck a "sweetheart deal" to protect the company from any post-Brexit EU tariff wall.

The decision was quickly seized upon by anti-Brexit MPs and campaigners, and places further pressure on May as she seeks to salvage her withdrawal agreement with the European Union and pass it through parliament.

The Nissan decision, first reported by Sky News, is a major setback for May's Conservative government, which had pointed to Nissan's 2016 announcement that Sunderland would make the SUV - months after the country's Brexit referendum - as proof that major manufacturers still had confidence in Britain's economic future.

Around 6700 people work at Nissan in Sunderland and it employs thousands more in the supply chain. The announcement Sunday made no mention of any layoffs relating to the X-Trail SUV decision.

Nissan is set to announce on Monday that it has changed plans to build the vehicle at its plant in Sunderland, northeast England, according to Sky News. "None of it is conductive to encouraging business investment in this country".

The company said planned investment in the next-generation Juke and Qashqai, also announced in 2016, was unaffected.

It sparked questions over whether a deal between the carmaker and the government had been struck, although ministers insisted that no "financial compensation" had been offered.

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The factory builds the Qashqai and Juke SUVs, along with the Nissan Leaf and Infiniti's Q30 and QX30 models, according to the Automotive News Europe Guide to European Assembly Plants.

A United Kingdom political leader said it's a "psychological blow" for the region.

Nissan is part-owned by French manufacturer Renault, which had led to concerns that production could be moved to France to avoid any tariffs which might be introduced on exports to the European Union if the United Kingdom leaves the single market in a hard Brexit.

A report by the Society of Motor Manufacturers and Traders (SMMT) said investment had effectively "stalled" amidst fears over the UK's future trading with the EU.

Earlier this month American vehicle manufacturer Ford confirmed almost 400 jobs would be lost at its engine manufacturing plant in Bridgend.

Just over 1.5 million cars left United Kingdom factories in 2018, a 9.1% decline on the previous year, and the lowest for six years.

It followed a similar move by Jaguar Land Rover to reduce its 44,000 workforce by 4,500 under plans to make £2.5 billion of cost savings - with most of the cuts in the UK.