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Japanese firms won't follow Nissan's UK example - expert

Published 01/11/2016

Nissan has committed to build the new Qashqai and X-Trail SUV at its Sunderland plant
Nissan has committed to build the new Qashqai and X-Trail SUV at its Sunderland plant

Nissan's decision to invest in its Sunderland factory is not likely to be repeated by other Japanese companies, according to a business guru involved in advising the car giant to come to north-east England in the 1980s.

Renowned management theorist Kenichi Ohmae said he was advising clients to hold fire on investments until it became clear what deal Britain would get from Brexit.

Prime Minister Theresa May hailed Nissan's announcement that it would build the new Qashqai and X-Trail SUV at Sunderland as "fantastic news" which showed that Britain was "open for business" following the vote to leave the European Union.

But Professor Ohmae told BBC2's Newsnight that it was "a very very minor one-company decision" and that other Japanese firms would not "follow suit". Instead, he expected them to wait to see agreements on post-Brexit tariffs and migration before making decisions on future investment.

Nissan's announcement has sparked controversy after ministers refused to reveal the nature of the Government's "support and assurances" offered to the company.

Asked what advice he was giving companies considering investing in Britain, Prof Ohmae told Newsnight: "Hold. We don't have enough information to make a prudent judgment."

Companies needing to make a swift decision "would prefer a larger market, which is the market of 27 countries rather than one country", he said.

He said he was advising executives to consider not only whatever assurances the Government was offering about the post-Brexit future, but also what the EU was saying.

"The answer from the UK government is that the conditions after the Brexit, as far as the automobile export from Sunderland, is going to be the same as now," said Prof Ohmae.

"The European Union hasn't said that. The European Union has said that 'We will not give UK any preference', and therefore that's just a statement by the UK government which will have to wait and see."

He added: "It is true that Nissan have said they will continue producing the two types of models after Brexit. That's a very very minor one-company decision, I don't think other companies will follow suit.

"I don't think that you can say for sure that the condition afterwards is going to remain the same as now and therefore I think it's a very special case, maybe Nissan had already made up their mind beforehand."

A tariff of 2%-3% on exports from the UK to the remaining EU "would not hurt the current traffic of goods and supply chains", said Prof Ohmae.

But he added: "If the migration of people - particularly the expert people - is hindered by the Brexit, then that's a more serious problem. Current operations in the UK can move people from anywhere in the EU to UK operations which is wonderful, because they love it, it works well. Therefore the migration of people is an equally important decision."

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