Britain's largest car plant may not survive Brexit

The largest car plant in the UK has survived the coronavirus pandemic and a major restructuring of the company to date. Despite this, it may not survive Brexit.

Nissan has warned that its huge plant in Sunderland will not function sustainably unless the UK concludes a new deal with the European Union that maintains duty-free car trade.

According to Nissan, the plant in Sunderland employs about 6,000 people and its supply chain creates another 27,000 jobs. In 2018, the factory produced 442,000 cars per year. However, since the Brexit vote in 2016, its future has been the subject of intense speculation.

Membership in the EU has allowed the export of UK-made vehicles for the entire bloc without having to pay customs duties, a benefit that the UK will lose if it cannot conclude a new trade deal with the European Union.

If no agreement is reached, vehicles produced in Sunderland will be subject to a 10% tariff when sold on EU markets.

The threat of new trade barriers pushed Nissan to take action. He abandoned plans to build his new X-Trail SUV last year, saying uncertainty over Brexit was partly to blame.

The United Kingdom left the European Union in January and the transitional period to trade defense ends in December. Despite this, little progress has been made in talks on a new agreement, and the UK government says it will not extend the negotiations.

The car industry has a lot to lose. Global car makers who have built factories in the UK are particularly vulnerable to any changes that disrupt their supply chains and just-in-time production, lowering profit margins at the worst possible time.

The industry had already suffered two years before the coronavirus outbreak, forcing factories and dealers around the world to shut down.

As the pandemic continues to take its toll across the globe, Nissan has undertaken a major overhaul of its alliance with Renault (RNLSY) and Mitsubishi Motors.