A leading figure within Nissan has expressed serious concerns regarding the UK’s viability as a location for automotive manufacturing, asserting that the nation currently presents a challenging environment for large-scale vehicle production. Alan Johnson, Nissan’s Senior Vice President of Manufacturing, voiced this opinion during parliamentary testimony on Tuesday.
His statement centered around several critical factors, principally high energy costs and broader economic pressures impacting operational expenses. Mr. Johnson specifically cited the Sunderland factory’s disproportionately elevated electricity bills – reporting that it surpasses the cost incurred by any other Nissan plant globally. “It is energy costs, it is the cost of everything involved in the cost of labour, training. It is the supplier base or lack of. All sorts of different issues. We are in a competition, you have to compete,” he explained.
This assessment follows recent operational adjustments at the Sunderland plant, including the temporary closure of one production line’s late shift – a move designed to improve efficiency. While this adjustment did not result in job losses; approximately 400 workers were redistributed across other manufacturing lines. This restructuring occurred alongside Nissan’s previously announced reduction of around 9,000 jobs worldwide, driven by a significant drop in operating profit—£1.59 billion—during the first half of 2024.
Johnson advocated for increased governmental support specifically targeted at bolstering the UK automotive industry and incentivizing electric vehicle production and sales. He emphasized that current legislation frequently presents obstacles rather than facilitating growth, stating: “Every time there is a piece of legislation that impacts on automotive, it needs to help us, not hinder us. It is difficult enough as it is at the moment. We need the market to be there.”
Despite these challenges, Nissan remains committed to expanding its Sunderland operations with planned investments in new electric models – the Leaf and Juke – representing a substantial £2 billion commitment made in 2023. The executive welcomed the recent adjustments to emission regulations announced by Sir Keir Starmer, acknowledging that previous concerns regarding the mandated shift towards zero-emission vehicles risked negatively impacting UK manufacturing. Specifically, Nissan previously voiced worries about the potential impact of the 80% new car emissions target by 2030.
While acknowledging that tariffs imposed by former President Trump had a “small” effect on the Sunderland plant’s output, Johnson noted that the global Nissan corporation as a whole experienced a more substantial negative influence. Recent data from a North East Combined Authority meeting indicated that road vehicles and components account for 30% of the region’s exports internationally, yet only a small fraction – less than six percent – are destined for the United States, providing a degree of insulation compared to other export markets.
Further developments include ongoing concerns among drivers regarding widespread road defects, leading to significant repair costs. Additionally, Tesla faces financial challenges with declining profits and potential headwinds from political sentiment, while a driver recently incurred substantial fines despite being exempt from certain driving regulations.
