The next generation Nissan Qashqai will be built in Sunderland © Press Association Images
The next generation Nissan Qashqai will be built in Sunderland © Press Association Images

UK aiming for tariff-free automotive supply chains

Will Green is news editor of Supply Management
31 October 2016

Business secretary Greg Clark has said the UK government will approach Brexit negotiations with the aim of achieving tariff-free access to EU markets for the automotive industry.

Clark said this was among the assurances he gave to Nissan before the automaker announced the next Qashqai and X-Trail models would be built in Sunderland, the UK’s biggest car plant.

Carlos Ghosn, chairman and CEO of Nissan, said: “The support and assurances of the UK government enabled us to decide that the next-generation Qashqai and X-Trail will be produced at Sunderland.”

Speaking on The Andrew Marr Show, Clark said that for carmakers in the UK and Europe: “The supply chain is integrated”.

“It’s my job to give assurances to Nissan and other investors that Britain will continue to be a great place to invest in the future. I was able to do that,” he said.

“Our negotiating remit is to have a constructive and civilised dialogue to look for the common interest here.

“Our objective would be to ensure we have continued access to markets in Europe and vice versa without tariffs and other bureaucratic impediments. That’s how we will approach those negotiations.”

Clark said his assurances to Nissan were contained in a letter, which the Labour Party has said should be made public.

Clive Lewis, Labour’s shadow secretary of state for business, energy and industrial strategy, said: “While we welcome the commitment to securing tariff-free trade for the automotive sector, Greg Clark has raised more questions than he’s answered. What about other manufacturing sectors, or services, which, let’s not forget, account for 90% of our economy? Nor has the government said anything about how is tariff-free access is going to be achieved.

“There is also the question of what the government promised Nissan if it isn’t. It is hard to believe that Nissan have committed millions of pounds on the basis of the government’s good intentions alone, but if he has nothing to hide then why doesn’t Clark make his letter to Nissan public?”

Daniel Ball, director of e-procurement provider Wax Digital, said Brexit uncertainty could lead to more British sourcing.

“Being in an unfavourable financial position globally may make UK businesses look at the cost benefits of buying locally in order to remove the exchange rate risk, even if local supply is not the cheapest price book option,” he said. “We may actually see a resurgence of the ‘Buy British’ standards of the past – but fuelled by necessity rather than the Brexiteers’ whim.

“For procurement teams in these organisations, a move such as this will mean significant focus on supplier sourcing and close inspection of supplier relationships, building in the necessary checks and due diligence to ensure that major changes in supply do not leave the business at risk and new suppliers are on-boarded swiftly and effectively.”

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