LONDON -- Nissan has canceled plans to build its new X-Trail SUV in its factory in Sunderland, England, saying just two months before Brexit that it will produce the next-generation model in Japan.
"The company has decided to optimize its investments in Europe by consolidating X-Trail production in Kyushu, the production hub for this global model," the company said in a statement on Sunday.
"While we have taken this decision for business reasons, the continued uncertainty around the UK’s future relationship with the EU is not helping companies like ours to plan for the future," said Nissan Europe Chairman Gianluca de Ficchy.
Nissan first said four months after Britain voted in June 2016 to leave the EU that it would manufacture a new model of the SUV at its plant in Sunderland. The move was seen as a major vote of confidence in the country's manufacturing future.
Nissan's Sunderland factory builds the smaller Qashqai SUV and other models. The Rogue, the X-Trail's North American sibling, is built in Tennessee.
As well as the X-Trail, Nissan said in 2016 it would build the next generation Qashqai in Britain after receiving government assurances over Brexit, in what was seen at the time as a boost for Prime Minister Theresa May.
Nissan said on Sunday that the Sunderland plant will "continue to benefit from the investment planned for Juke and Qashqai.”
The failure of Britain's government so far to negotiate a smooth exit plan from the EU has made car manufacturers less willing to use Britain as a European manufacturing center. Investment in Britain's car industry halved last year, data showed on Thursday, and car production by Nissan in Britain fell by more than 10 percent.
Industry body the Society of Motor Manufacturers and Traders said leaving the EU on March 29 without a transition deal to preserve the smooth flow of parts and finished vehicles across EU borders would cause "permanent devastation" to the British car industry.
European sales of the X-Trail fell 31 percent to 47,923 last year, according to JATO Dynamics market researchers.
