Currently reading: Government’s Brexit offer to Nissan to be extended to all car makers
All car manufacturers will be offered the same deal as Nissan in the wake of the EU referendum to secure the future of British car manufacturing

The UK car industry has been assured that the deal offered to Nissan - which would eliminate any tariffs imposed on the companies' exports to Europe - will be offered to all car manufacturers, according to business secretary Greg Clark.

Talking on the BBC’s Andrew Marr Show, Clark said: “It is my job to provide the assurances to Nissan and others that Britain is going to continue to be a great place to invest. I was able to do that and this [Nissan’s continuing investment] was the result that we saw.

“One of the assurances I was able to give is that our intention, our negotiating remit when it comes to the discussions with our European partners is to have a constructive and civilised dialogue to look for the common interest here.

The government’s promises, which were made earlier this month to the UK’s largest producer of cars, Nissan, prompted the firm to continue investment in its Sunderland plant. Nissan boss Carlos Ghosn had previously warned at the Paris motor show that a so-called ‘hard Brexit’ could cause the car giant to reconsider its future investment in Sunderland, saying "If I need to make an investment in the next few months and I can’t wait until the end of Brexit, then I have to make a deal with the UK government."

“Our objective would be to ensure that we have a continued access to the markets in Europe and vice versa, without tariffs and without bureaucratic impediments. That is how we will approach the negotiations. It is important to manufacturing they get the minimum or no tariffs and no impediments,” Clark added. 

In the wake of the UK’s vote to leave the European Union, there were fears that large automotive businesses, such as Nissan and Vauxhall, would pull out of the UK. Several manufacturers have already raised their prices since the vote because the value of the pound has fluctuated.

Both car production and car registrations have yet to be affected by the vote, according to statistics from the SMMT, but industry figureheads are still warning that the damage may not yet have come into play. A smaller UK manufacturer, MG, has already ceased assembly in the UK for this reason, although it represents a very small percentage of overall production.

Mike Hawes, SMMT CEO, said: “We’re greatly encouraged by the Secretary of State's comments and those made by the Prime Minister last week. It is important that the Government makes it a priority to safeguard the competitiveness of this important and globally successful sector as we leave the EU. This means maintaining a competitive business environment, ensuring talent can be recruited from abroad and securing the benefits we currently enjoy in the single market - including tariff free trade unhindered by any customs bureaucracy."

Back to top

After Nissan boss Ghosn’s talk with Theresa May, which he described as "positive and productive", Ghosn said the government "will continue to ensure the UK remains a competitive place to do business", but did not clarify exactly what was said.

He later said: “The support and assurances of the UK government enabled us to decide that the next-generation Nissan Qashqai and Nissan X-Trail will be produced at Sunderland. I welcome British Prime Minister Theresa May’s commitment to the automotive industry in Britain and to the development of an overall industrial strategy.”

Join the debate

Comments
21
Add a comment…
Ski Kid 1 November 2016

most people do not understand the tariffs

There are thousands of categories from parts to finished products that includes foods along with cars white goods and clothes etc.They can range in the Uk from about 5% to over 10%.If the Eu decide to put import tariffs on say uk cheese and cars inc components those countries ie France or Germany keep the money collected.Like wise the Uk would keep monies collected.Only an idiot would divulge the likely Uk scenario to playout upfront.Even Nissan would not have been told that much ,as otherwise the French guy in charge of Nissan could leak it out to his Euro mates.
It is straight forward in that the Uk imports way more than exports so if there is any backstabbing from the Eu simply put massive 30% tariff on importers and utilize some of this to subsidise the exporters whom likewise would have to pay large tariffs to the Eu on exports.So the whole thing would be a fools errand with the Eu on the losing side i.m.h.o.
Whisper 2 November 2016

Ski Kid, you are correct in

Ski Kid, you are correct in the methodology of how tariffs work, but in practical terms I think the scenario you described is flawed. Everyone knows that the UK imports far more than it exports and as agreed it is the importer that pays tariffs. Therefore, when we look at who will benefit in the scenario where 30% tariffs are imposed on both exports and imports, the UK will come off worse as you guys (I live in Zambia) will be paying 30% additional on a lot more stuff as compared to the EU population. Basically whatever the economy gains in UK imposed tariffs it will lose (plus more) in payments of EU imposed tariffs.
Whisper 1 November 2016

Tariffs

We have to remember that hardly any of the components that are put together on the assembly line in the process of producing a Nissan are actually manufactured in the UK. They have to be imported from EU and non-EU states.

I think Ms May has simply assured Mr Ghosn that there will be no tariffs placed on the imports of these component parts, thereby keeping them at the same price for Nissan to buy as they are now. This will mean that Nissan will be able to produce a car for the same price (taking fluctuations in currency and costs of production out of the equation) as they do now. As others have observed she has no way of assuring Nissan or anyone else about what tariffs might be imposed on cars being exported as these are to be decided when the negotiations begin.

I think even the assurances that have been given are risky though, because trade and tariff deals are generally reciprocal. Therefore, if the UK decide that Nissan can import its component parts tariff free, they are making the assumption that the EU and non-EU states are not going to impose tariffs on component parts made in Britain and exported for use in their vehicles. The boys and girls in Brussels might take this as another affront by the UK govt and harden their stance further.

The Mewster 1 November 2016

Tariffs

Ah, thanks Whisper, I didn't think of the component import situation.

Good point as well about the messaging this sends to other EU states. What would be nice would be to get all of the trade agreements sorted, and then let parliament make a decision... ;)

GODFATHER 31 October 2016

The Remainer still crying.

I'm fed up with people saying that we were lied to. The fact that we were promised Armageddon and no country would trade with us was the remainer obviously telling he truth right.
The Mewster 31 October 2016

Re: The remainder still crying

Just to confirm, I'm not making a comment on remain vs leave...

My comment is just regarding the government statement which seems to be irrelevant, as I can't think of a scenario where a government would want to impose export tariffs? All that achieves is making your own exports less competitive, which is obviously not desirable.

The fact is that if we leave the EU the UK government has no control over any import tariffs that another country may decide to impose, other than we impose our own tariffs on imports of their goods. However, tariff wars like this are generally a bad thing and to be avoided as they just end up distorting the market and hurting industry.

If countries in Europe decide to start imposing import tariffs on UK car exports, making them less competitive in their main market, then the manufacturers are either going to want subsidies/grants to stay (so effectively UK taxpayers are subsidising the car industries of other countries) or they'll move manufacturing to mainland Europe to remain competitive.

The Mewster 31 October 2016

Re: The remainder still crying

Just to confirm, I'm not making a comment on remain vs leave...

My comment is just regarding the government statement which seems to be irrelevant, as I can't think of a scenario where a government would want to impose export tariffs? All that achieves is making your own exports less competitive, which is obviously not desirable.

The fact is that if we leave the EU the UK government has no control over any import tariffs that another country may decide to impose, other than we impose our own tariffs on imports of their goods. However, tariff wars like this are generally a bad thing and to be avoided as they just end up distorting the market and hurting industry.

If countries in Europe decide to start imposing import tariffs on UK car exports, making them less competitive in their main market, then the manufacturers are either going to want subsidies/grants to stay (so effectively UK taxpayers are subsidising the car industries of other countries) or they'll move manufacturing to mainland Europe to remain competitive.

The Mewster 31 October 2016

Re: The remainder still crying

Just to confirm, I'm not making a comment on remain vs leave...

My comment is just regarding the government statement which seems to be irrelevant, as I can't think of a scenario where a government would want to impose export tariffs? All that achieves is making your own exports less competitive, which is obviously not desirable.

The fact is that if we leave the EU the UK government has no control over any import tariffs that another country may decide to impose, other than we impose our own tariffs on imports of their goods. However, tariff wars like this are generally a bad thing and to be avoided as they just end up distorting the market and hurting industry.

If countries in Europe decide to start imposing import tariffs on UK car exports, making them less competitive in their main market, then the manufacturers are either going to want subsidies/grants to stay (so effectively UK taxpayers are subsidising the car industries of other countries) or they'll move manufacturing to mainland Europe to remain competitive.

The Mewster 31 October 2016

Re: The remainder still crying

Just to confirm, I'm not making a comment on remain vs leave...

My comment is just regarding the government statement which seems to be irrelevant, as I can't think of a scenario where a government would want to impose export tariffs? All that achieves is making your own exports less competitive, which is obviously not desirable.

The fact is that if we leave the EU the UK government has no control over any import tariffs that another country may decide to impose, other than we impose our own tariffs on imports of their goods. However, tariff wars like this are generally a bad thing and to be avoided as they just end up distorting the market and hurting industry.

If countries in Europe decide to start imposing import tariffs on UK car exports, making them less competitive in their main market, then the manufacturers are either going to want subsidies/grants to stay (so effectively UK taxpayers are subsidising the car industries of other countries) or they'll move manufacturing to mainland Europe to remain competitive.