Nissan UK supports its Japan parent

Nissan UK claims that while stronger business across the European continent, helped by high demand for Qashqai and X-Trail models, has pushed sales higher difficulties in Japan have given the firm's financial performance a knock.

"Challenging conditions” in Japan seemingly have left officials nursing a financial blow, with weaker-than-expected earnings of £1.1bn for the three months to December 31, down from £1.4bn a year earlier.

Nissan’s Sunderland plant is set to begin production of the next generation versions of the Qashqai and X-Trail, though boss Carlos Ghosn has since warned he will review the Wearside plant once the workings of a Brexit deal are finalised.

It will be the first time the 4x4 X-Trail, which industry experts have tagged the Qashqai’s bigger brother, has been built for European markets outside Japan.

According to the company’s latest results, released yesterday, Nissan sold 1.09 million vehicles worldwide during the last quarter, which was up from 1.02 million a year ago.

The group’s figures for the nine months of its financial year also showed strong demand in the US, China and Europe had offset issues in Japan.

However, Ghosn said earnings were weighed down by higher marketing and selling costs, as well as a currency hit, with Japan “challenging” and sales across Asia, Oceania, Latin America, the Middle East and Africa falling 3.9 per cent to 596,000.

Ghosn said: “Although these results reflect continued currency headwinds, we remain confident of achieving our fiscal year guidance.”

“Our underlying performance was enhanced by solid demand in the US, China and Western Europe, along with the continued benefits of our cost controls and Renault- Nissan Alliance.”

Ghosn has warned he will assess the competitiveness of Nissan’s near 7,000- job Sunderland base once the final outcome of Brexit negotiations becomes clear, saying spending decisions could be impacted.

The business previously hinted future production of the Qashqai, which is already made on Wearside, could hinge on a UK government EU compensation package for any export tariffs and financial hardship caused.

But, following subsequent Government talks, the company revealed the site will oversee a new model, as well as the X-Trail, leading some critics to claim the move was a result of a sweetheart deal. Nissan, however, has always denied those allegations.

Colin Lawther, European senior vice-president for manufacturing, purchasing and supply chain, instead claims the plans represented a “pat on the back” for the Sunderland factory.

It is understood work on the new Qashqai could start in 2018. Nissan also makes the Juke hatchback and the electric Leaf at Sunderland and has extended its factory to accommodate production of the luxury Infiniti Q30 and QX30 models. The pair represent the first time vehicles have been exported from the Sunderland-based plant to the US and China.

Last month, Nissan revealed its UK factory produce 507,430 vehicles in 2016, the second highest number in the plant’s 30-year history. It means the site is now close to seeing nine million vehicles roll off its production lines in that time.