Business / Corporate

Nissan deals fresh blow to U.K. by stopping Infiniti production at Sunderland plant amid Brexit

Bloomberg

Nissan Motor Co. Ltd. will stop production of its upscale Infiniti models in the U.K. as part of a plan to withdraw the brand from Western Europe and focus on North America and China.

Production of the Q30 sedan and QX30 crossover models will cease by July at Nissan’s Sunderland plant in northeast England, the carmaker said Tuesday. It’s the second blow within weeks for the U.K.’s biggest car plant, after Nissan abandoned a plan to make the X-Trail sport utility vehicle there, citing uncertainty over Brexit as a factor.

“In anticipation of its planned withdrawal from Western Europe in early 2020, the company is working to find alternative opportunities for any employees who would be affected,” Infiniti said in a statement. Operations in Eastern Europe, Middle East and Asia won’t be affected.

Infiniti’s retreat from Europe marks an end to an 11-year effort to establish the brand in one of the world’s most competitive markets for luxury cars and the home of premium marques including Volkswagen AG’s Audi, Daimler AG’s Mercedes-Benz and BMW AG’s namesake brand.

Last year, Nissan’s deliveries of Infiniti vehicles plunged 34 percent to just 10,958 units. That compares with Audi’s 2018 total of 700,674 vehicles, BMW’s 778,343 and Mercedes’ 838,358 in the European Union, according to the European Automobile Manufacturers Association. Even Japanese rival Toyota Motor Corp.’s Lexus sold 44,961 vehicles in EU countries last year, up 2.7 percent from 2017.

Sunderland made about 12,000 Infinitis last year, a sliver of its more than 442,000 total units produced. The two British-made subcompact models will disappear from the brand’s lineup globally, a spokesman said. Nissan will electrify its luxury division’s portfolio from 2021 onward and discontinue diesel offerings to focus on its SUV lineup in North America and unveil five new models in China.

Car companies are streamlining their portfolios and production sites amid growing global pressures, including trade wars, the costly shift to electric cars and weakening markets. The U.K. has been particularly hard-hit, with Brexit adding another drag.

Honda Motor Co. announced last month it will shut its plant in the U.K., while Jaguar Land Rover is cutting about 4,500 jobs, most of them in Britain. Nissan’s Sunderland plant employs more than 7,000 people, and 250 of them are focused on the Infiniti models, a spokesman said.

“The company will place more focus on its SUV lineup in North America, bring five new vehicles to China over the next five years, work to improve quality of sales and residual value, and realize more synergies with Nissan Motor Company,” Infiniti said.