Shelved Nissan plan fuels concerns in Britain

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"Grant support for training and development and environmental improvements were applied for and authorized ... on the basis that both the Qashqai and the X-Trail models would be built in Sunderland", Clark informed parliament.

Nissan dealt another blow on Sunday by announcing it was shifting future investment away from its largest European plant in Sunderland, northeast England, which employs 7,000 people.

The Business Secretary Greg Clark was on Monday night facing criticism after it emerged that he offered Nissan an £80million Brexit sweetener despite previously insisting there had been "no chequebook" involved in the deal.

But questions remain about Brexit's impact on the decision.

The FT quoted from a letter sent by business minister Greg Clark to then-Nissan boss Carlos Ghosn in which he promises to protect the auto sector as Britain leaves the European Union. Nissan aims to optimize its investments in Europe by consolidating X-Trail production in Kyushu, the production hub for the global model, the company added.

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"It will be a critical priority of our negotiation to support United Kingdom vehicle manufacturers and ensure that their ability to export to and from the European Union is not adversely affected by the U.K.'s future relationship with the EU".

The world's biggest free trade deal came into force on 1 February and there are fears that Japan will stop using the United Kingdom as a manufacturing base, especially with a 0% tariff on vehicle imports built into the EU-Japan agreement.

The company says falling demand for diesel cars in Europe had forced it to invest in other technologies as the segment is hit by levies and crackdowns, warning two months before Brexit that uncertainty is also making plans harder.

Experts have warned that a new EU-Japan trade deal could pose a post-Brexit threat to British industry in the wake of Nissan's decision to backtrack on expanding its Sunderland plant.

It is another sign of the decline of British automotive manufacturing, on which Fleet Europe reported last week.

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But speaking alongside Japanese Prime Minister Shinzo Abe in Tokyo, she said: "We want to do everything to avoid a no-deal, because that would increase the uncertainty".

"They also pointed out what they've said consistently since 2016, that a risk of a no-deal Brexit is a source of damaging uncertainty".

Mr Ramsbotham said: "The automotive sector in this country is vitally important and needs to be protected".

The Prime Minister of the United Kingdom, Theresa May, expressed on Tuesday her commitment to Northern Ireland in favour of its plan to withdraw from the European Union (EU), a process known as Brexit.

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