U.K. Extends Nissan Brexit Promise to Other Carmakers

The British government hopes to guarantee tariff-free access to Europe for England’s domestic auto industry after the U.K. exits the European Union.

Business Secretary Greg Clark told BBC over the weekend the government aims to remain part of an EU customs union, which would enable it to continue trading freely within the bloc even though it isn’t a member. Turkey enjoys such an arrangement now.

Clark says he advised Nissan Motor Co. of the plan in a letter ahead of CEO Carlos Ghosn’s meeting with Prime Minister Theresa May late last week. Ghosn previously had threatened to phase out production at its huge British manufacturing complex in Sunderland if Brexit ended up raising tariffs on vehicles built there and sold in Europe.

But after his meeting with May, Ghosn announced Sunderland would produce its next-generation Qashqai and X-Trail SUV/crossover. Clark says the government did not promise a direct compensation for future tariff increases.

He did tell BBC the letter included government vows to increase funding for training, hike research on electric vehicles and expand Britain’s domestic auto supply base. Clark added that the government has extended the same pledge to other carmakers that operate factories in the U.K. and to unidentified other manufacturers.

Last year the U.K. produced 1.6 million cars, 80% of which were exported, according to the Society of Motor Manufacturers and Traders. SMMT estimates the British auto industry consists of about 169,000 direct employees and 78,000 people who work for the industry’s domestic supply chain.