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A senior Nissan boss has warned that “the economics needs to work” before the company can produce new electric models of its Juke and Qashqai cars in the UK.
Ashwani Gupta, the company’s chief operating officer, has stated the UK faces challenges in remaining competitive with other carmakers.
Manufacturing costs in the UK are higher than in other countries due to higher energy bills and overall inflation, he said.
Nissan employs more than 6,000 people at its manufacturing plant in Sunderland.
Mr Gupta warned that reducing production costs was key to keeping the UK competitive. He added other tools to keep Britain attractive for carmakers, namely continued government support for the electric vehicle transition and resilient supply chains.
Nissan has committed to building its Leaf electric car successor at its Sunderland plant, but Mr Gupta said the company “needs to be economical in allocating production of the new Juke and Qashqai models to its 44 factories around the world, to justify it”.
Decisions on where the new Juke and Qashqai will be built won’t have to be made for a few years, as the next models for these big hitters from Sunderland aren’t due until 2027-28 and usually in 2027.
Automakers have often urged the government to provide more support. Nissan recently secured around £100m in public funding for a £1bn expansion of a Chinese-owned battery factory next to its Sunderland factory.
But the landscape of global auto production is being reshaped, with the U.S. offering tens of billions of dollars in subsidies to automakers that move production and supply chains there. The EU is also expected to respond with a carrot of its own.
Mr Gupta’s comments came as Nissan and Renault revealed details of a major shakeup in their often tense 24-year alliance after months of talks between the auto industry giants.
The two companies said in a joint statement that they agreed that Renault would reduce its stake in Nissan, thereby “rebalancing” their relationship.
As part of the deal, Nissan will take a stake in Renault’s flagship electric vehicle unit, Ampere.
The companies also said they would collaborate on electronics and battery technology and save money through joint projects in Europe, India and Latin America.
Under the agreement, Renault will reduce its stake in Nissan in Japan from more than 43 percent to 15 percent, the same as Nissan’s stake in Renault in France.
The companies also said Nissan would take a stake of up to 15 percent in Renault’s new electric vehicle venture, Ampere.
Christopher Richter of investment group CLSA said the changes were necessary to preserve the two-decade-long partnership.
“It’s a last ditch attempt to save an alliance where the two partners don’t get along very well,”
“Hopefully, by equalising their status in the alliance, they can put some of the rancour behind them, and find a limited number of activities where they can cooperate and add value to each other,” Mr Richter added.
The move comes at a time of massive change in the auto industry as it transitions to electric vehicles and adopts new technologies.
“We all know that auto firms will be amalgamated into five or six globally, especially due to the big changes occurring in AI technology,” said Seijiro Takeshita from the University of Shizuoka in Japan.
“In that context, Nissan and Renault need to find a good partner, and that’s what they are, at least nominally. They cannot and do not have the luxury of going alone in this battle,” he added.
The alliance was formed in 1999 when Renault rescued Nissan from bankruptcy.
Mitsubishi joined in 2016 after Nissan took a large stake in the struggling Japanese company.
The alliance was shaken in November 2018 by the arrest of Nissan CEO Carlos Ghosn on charges of underreporting his annual salary and embezzling company funds. Mr Ghosn has denied the allegations.
At the time, Mr Ghosn was chief executive of the Japanese automaker. He was also chairman of France’s Renault and head of a three-way alliance between the two automakers and Mitsubishi.
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