Government letter reveals planned £80m Nissan support package

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For this reason, the announcement that following reassurances from the government Nissan would be investing in its plant in Sunderland, in north east England, and building the new X-Trail there was a rare ray of sunshine. However, things have changed since then.

Nissan has chose to move assembly of X-Trail cars to its global production hub on the island of Kyushu in southern Japan, reversing a decision made in October 2016.

Meanwhile, talking to the Financial Times, the government's business secretary Greg Clarke described Nissan's decision as a "warning sign" of the damage that would be caused by a no-deal Brexit.

He said: "The fact is there is no business case for a diesel vehicle like this to be produced in Britain, or anywhere in the EU".

The revelation follows Nissan's decision on Sunday to withdraw the production of its X-Trail compact crossover SUV from its massive plant in Sunderland and move this to another factory in Japan.

The company had said in 2016 that it would produce the new X-Trail model at its Sunderland factory after getting reassurances from the government over Brexit - an intervention hailed by Prime Minister Theresa May as a "vote of confidence" in British business after voters backed leaving the EU.

The Times newspaper reported today (Monday, January 4) that Ministers were considering withdrawing the package, which was created to help fund the training of staff at Sunderland in preparation for the new model's arrival on production lines, following the manufacturer's reversal.

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Nissan sought to allay concerns of its Sunderland employees, saying it will go ahead with planned spending on the next-generation Juke and Qashqai models.

The company said planned investment in the next-generation Juke and Qashqai, also announced in 2016, was unaffected.

"Therefore the company has made a decision to optimise its investments in Europe by consolidating X-Trail production in Kyushu".

U.K. Business Secretary Greg Clark - a proponent of keeping close economic ties with the European Union - said Monday that Nissan regarded the risk of a no-deal Brexit as "a source of damaging uncertainty". It cut hundreds of jobs at its Sunderland factory in the north of England, Britain's biggest vehicle plant, previous year as output slumped 11 percent, hit by levies and crackdowns on diesel.

A source told Reuters at the time that Nissan received a letter from the government promising extra support in the event that Brexit hit the competitiveness of the Sunderland plant.

Nissan has told the government the United Kingdom must come together and resolve the question of how we plan to trade with the European Union in future. Diesel cars dropped from a 55% share of the European market - the UK, Germany, Italy, France, Spain - in 2014, to 36% in 2017.

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