Nissan's Ghosn may ask UK to cover Brexit-related losses

Business Friday 30/September/2016 14:22 PM
By: Times News Service
Nissan's Ghosn may ask UK to cover Brexit-related losses

Tokyo: Nissan Motor may ask the UK to compensate it for any negative consequences resulting from the nation’s departure from the European Union as a condition for making new investments in the country, Chief Executive Officer Carlos Ghosn said.
Further spending decisions will depend on clarifying Britain’s relationship with the EU once it exits, Ghosn said on Thursday at the Paris Motor Show. Nissan built one in three cars in the UK last year, and about 80 per cent of its production there is exported, exposing the Yokohama, Japan-based carmaker to risks if tariffs are imposed.
"What is difficult today is the uncertainty,” Ghosn, who’s also CEO of French carmaker Renault, said in an interview on Thursday with Bloomberg Television. "What are going to be the conditions of the Brexit?”
The UK’s vote to leave the EU may cost automakers about 2.8 million light-vehicle sales through 2018, researcher IHS Markit said in June. Brexit may lead to levies of as much as 10 per cent on vehicles built in the UK and exported to the EU, while components may face a 2.5 per cent tariff, according to the Society of Motor Manufacturers and Traders, the nation’s auto industry association.
Nissan shares fell 2.1 per cent to 982.7 yen at the close in Tokyo, reaching the lowest price since August 26. The stock has dropped 4.3 per cent since June 23, when the UK held the referendum that decided on its departure from the EU.
Government discussions
The Japanese carmaker is discussing options with the UK government, though it hasn’t asked for anything so far, Ghosn said. Nissan’s factory in Sunderland, England, has a workforce exceeding 6,000 employees, and the plant’s suppliers employ about 24,000. The site produces Nissan’s Qashqai, Note, Juke and Leaf models.
At the Paris show, Ghosn outlined a system that would give "some kind of compensation” for carmakers that export to Europe in the event the EU establishes new tax barriers when the UK departs the trade bloc.
"This is a position we have already voiced to the British government, saying that if you want to know if we want to invest or not, please tell us what will be the new conditions of the relationship between the UK and Europe,” he said at a press conference.