Britain’s biggest car factory could face serious difficulties if the UK does not qualify for new “Made in Europe” rules from the European Union, its owners have warned.
The Nissan plant in Sunderland, which employs 6,000 people and has been regarded as a manufacturing success story since production began in 1986, is facing “an existential threat” if it is not covered by the new rules, according to one insider.
The EU is working on the plans that would grant public subsidies for the production of electric vehicles made in European plants to protect them from cheaper vehicles from China.
According to the Financial Times, Nissan has warned the government of dire consequences if it is not fully included in the so-called “Made in Europe” scheme.
The proposals from competition commissioner Stephane Sejourne presently exclude Nissan and other large car makers with large UK plants, such as Jaguar Land Rover and Toyota.
The industry trade body has said it is “gravely concerned” by the proposals set out in the European Commission’s (EC) Industrial Accelerator Act.
A statement from Mike Hawes, the chief executive of the Society of Motor Manufacturers and Traders, said: “As drafted, it would discriminate against UK-made vehicles and components, damaging a trading relationship worth almost £70bn annually.
“It is a position that the UK industry and government sought to avoid, given we are both each other’s largest customers and suppliers. However, the strict EU assembly rules and EU27 eligibility criteria currently proposed would effectively put UK manufacturers at a systemic competitive disadvantage in the EU market, a situation which may also be in breach of the EU-UK Trade Cooperation Agreement – the Brexit deal.”
He is asking the UK government to work with Europe to “urgently resolve the situation”.
Mr Hawes added: “This is not just to ensure choice for British and European consumers – especially in zero emission vehicles – but to deliver the economic growth and security everyone craves.”
Nissan has long praised the Sunderland factory, noting that fears of regular industrial action were unfounded.
But one industry executive told the FT that if Nissan is “frozen out of access to EU incentives” it could pose “an existential threat”.
Sources close to Nissan played down talk of closing the plant, in which it has invested billions of pounds.
A UK government spokesperson said: “The UK is a close and trusted European partner, committed to our shared security and economic co-operation. Now is the time to work together as like-minded partners to boost growth, resilience and economic security.”
The business secretary, Peter Kyle, visited Brussels last week to make the case for the UK to be included in the ‘Made in Europe’ initiative. He did not meet Ms Sejourne, however, according to reports.
It is understood Nissan thinks the EC has shifted its position sufficiently to ease the most major of concerns, but it would like further reassurances that it would be covered by the rules.
Nissan said: “We’re pleased the commission has addressed industry concerns and recognised how important partners are to the EU supply chain, by allowing ‘content equivalent to Union origin’ to count under the Act. This change should let vehicles built in these locations — which often include a lot of EU-made parts—qualify for government purchasing and national EV incentives. However, using a different definition for corporate fleets and the small car super credit creates confusion and adds unnecessary complexity for the industry. A simple solution would be to apply the ‘equivalent to Union origin’ rules across all types of EV support, which would be in line with the EU’s goal of making regulations easier to understand and apply.”