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Discussion Starter #1
Interesting that the FT and other media are reporting that if we end up with car tariffs between the U.K. and the European Community, then Nissan might shift more production to the U.K. Under this scenario they would look to increase their U.K. market share from the current low 6% to 20%. As the Leaf is already made in Sunderland could this mean more EVs being built in the UK?
 

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This one?

The Nissan Europe spokesperson said: "We’ve modelled every possible ramification of Brexit and the fact remains that our entire business both in the UK and in Europe is not sustainable in the event of WTO tariffs.

“We continue to urge UK and EU negotiators to work collaboratively towards an orderly balanced Brexit that will continue to encourage mutually beneficial trade.”

Publicly the company was still maintaining its UK plant could be closed alongside some of its Europeans projects if both sides cannot agree to a deal.
 

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Discussion Starter #10
This one?
This quote is just part of the article - the earlier part sets out the proposition I referred to at the start. Nissan no doubt are looking at a number of scenarios but I found this one interesting. It suggest that Peugeot might be looking at a scenario involving expansion of Vauxhall in the U.K. also.
 

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This quote is just part of the article - the earlier part sets out the proposition I referred to at the start. Nissan no doubt are looking at a number of scenarios but I found this one interesting. It suggest that Peugeot might be looking at a scenario involving expansion of Vauxhall in the U.K. also.
So they have a story which is denied by the official spokesman for Nissan.

Now tell me why Nissan would think investing in the UK is a good idea.
 

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Discussion Starter #12
The article suggests because they will have a big competitive advantage over EC based manufacturers, they can grow market share from 6% to 20%.
Nissan has invested heavily in the U.K. and so they can protect that investment by expanding U.K. production aimed at the U.K. market. It is one of the most efficient car factories in Europe.
 

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So they have a story which is denied by the official spokesman for Nissan.

Now tell me why Nissan would think investing in the UK is a good idea.
A number of possible reasons:
  • They've invested £4bn in Sunderland and is their most efficient factory globally
  • They're failing in Europe but have a chance to grab a big slice of the UK Market especially if tarrifs reduce European competition
  • Their UK factory already has EV manufacturing capability and they would be mad to invest in France given the situation there!
  • Govt subsidies
 

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Discussion Starter #14
Interesting to think if Honda had built a cheaper EV (sub £20k) in the U.K. they could have stolen a march on others
The EC trade deal with Japan instead made it cheaper to make cars in Japan and export them.
It will be interesting also to see what Toyota decides to do.
The scenario the FT article refers to in a car tariff world where a manufacturer decides to expand rather than leave was not one I had though about before. It may not come to pass but I thought worthy of attention.
There has been speculation about subsidising battery production in the UK to support car manufacturers (not in this FT article but previously in various media).
I guess if the UK Government is serious about developing the U.K. economy in a post Brexit world then it will need to do a lot more to support the car industry.
 

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Once we have a free trade deal with Japan too, there will be a strong case for concentrating all car manufacturing there, not here.
 

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Discussion Starter #18
I suspect this is what is really behind the story. Nissan probably want matched funding to put more money into Sunderland or they pull it completely.
Perhaps. JLR has also been pressing for support for a battery plant. The Germans are also reported as looking at subsidising battery production in their country. It usually has to be a shared facility if it is to avoid current EU rules. I am not sure if Tesla is getting support for its facility near Berlin. The FT article, which of course is speculative, is considering a scenario where the U.K. and EU are unable to agree a comprehensive free trade deal. One of the potential stumbling blocks is the argument about EU rules and how those rules are policed. In the absence of agreement then tariffs will be imposed and it will mean cheaper U.K. produced cars for the U.K. compared to EU produced cars. In avoiding being a rule taker the U.K. may also be able to support key sectors by subsidising key infrastructure/ research funding. I am trying to avoid making a judgement at this stage about the rights and wrongs of this approach.
The U.K. in avoiding becoming a rule taker could also set its own standards. An interesting scenario would be one whereby the U.K. sets higher standards or is more ambitious than the EU in for example reducing emissions. That could push U.K.car plants to produce more EVs in a faster timescale. There could be greater subsidies for not just to manufacturers but also to consumers. The EU based manufacturers would end up selling less cars to the U.K. but of course U.K. based manufacturers would sell less to Europe. Toyota and JLR would suffer.
 

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JLR has also been pressing for support for a battery plant.
If you look at their track record, JLR are masters at getting regional development and R&D funding from the government.

Articles like this (especially in the FT) don’t just happen because of journalism. There will most likely be a ‘leak’ from Nissan which they can use as leverage against ministers and local MP.
 

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Discussion Starter #20
I guess car manufacturers won’t be the only ones looking to try and get aid. It happens the world over.
 
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