Government backs £1bn Nissan lifeline loan amid raised hopes for future of its Sunderland plant
The Government will back a £1billion loan to Japanese carmaker Nissan as it undergoes a major restructuring.
The struggling auto giant, which operates the UK's biggest car plant in Sunderland, is planning to close seven factories and cut 20,000 jobs and is looking to raise £5.2billion to keep afloat.
The £1billion is guaranteed by UK Export Finance, an arm of the Treasury, and will be seen as safeguarding workers in Sunderland as Nissan cuts its number of plants from 17 to 10 globally.
Nissan has not said the factory is safe but boss Ivan Espinosa has insisted it will make more electric cars there, amid reported fears that Nissan could be close to running out of cash by the end of March.
The Government will underwrite a £1billion loan from Nissan's lenders.
Nissan will also sell part of its stakes in French carmaker Renault and battery firm Aesc Group, and plants in South Africa and Mexico at a crunch time for manufacturers who are reeling from Donald Trump's trade wars.
Britain's recent trade deal with the US to reduce tariffs from 25 per cent to 10 per cent for up to 100,000 cars made in the UK has contributed to the UK's attractiveness as an investment destination.
This week, Toyota, the world's biggest car manufacturer, said it would expand production in the UK.
Earlier this month, it emerged that Nissan was plotting 11,000 job cuts on top of the 9,000 roles put at risk in November.
It has lost £3.4billion in the last year.
A 73-year low for production
UK vehicle production fell 16 per cent to 59,000 last month, the lowest April level since 1952 – excluding the pandemic in 2020.
Car manufacturing was down 9 per cent partly due to the timing of Easter, and the changeover to new models.
Exports to the EU were down by 19 per cent and to the US by 3 per cent.
Output of commercial vehicles slumped more than two-thirds after a post-pandemic boom in HGV demand faded, according to Society of Motor Manufacturers and Traders' figures.
Total production for 2025 is down 8 per cent to 298,000, the worst start for a year since 2009.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
an hour ago
- Reuters
China urges halt to auto industry's bruising price wars
SHANGHAI, May 31 (Reuters) - China called on Saturday for its automotive industry to halt brutal price wars, as a threat to the sector's health and sustainable development, after key executives jousted over pricing pressure following large discounts offered to buyers. Tension between some top players in the world's largest auto market has spilled into the open as competition intensifies, with price wars begun in early 2023 showing little sign of abating, despite concern among both government and industry. The industry ministry vowed to step up efforts to correct what it called excessive competition, the official news agency Xinhua said on Saturday. "There are no winners in a 'price war', let alone a future," the agency cited an unidentified ministry official as saying. The comments came after fresh incentives offered last week on more than 20 models by electric vehicle giant BYD ( opens new tab, that prompted several rivals, such as Geely ( opens new tab and Chery ( to follow suit. The ministry's comments echo a similar call, also on Saturday, by the China Association of Auto Manufacturers (CAAM) for a truce in the price wars, saying they affect profitability and efficiency. It added that a new round of price war "panic" was touched off in China after substantial discounts offered on May 23 by an automaker it did not identify. It proposed remedies such as auto companies sticking to the principle of fair competition and larger players refraining from market monopolies. "Apart from reducing the price of goods according to law, enterprises shall not dump goods at prices below cost," it added. BYD's incentives, which include government trade-in subsidies, can cut the domestic cost of its BYD Seagull electric hatchback to as little as 55,800 yuan ($7,750). On Friday, a BYD executive had decried as alarmist comments by the chief of Great Wall Motor that the industry was "unhealthy". Great Wall's ( opens new tab Wei Jianjun had said pricing pressure was hammering the bottom lines of car companies and suppliers. ($1=7.1991 Chinese yuan renminbi)
BBC News
2 hours ago
- BBC News
Healey sees defence spend rise to 3% of GDP by 2034
There is "no doubt" that UK defence spending will rise to 3% of GDP by 2034 at the latest, Defence Secretary John Healey has said.A source told the BBC this was Healey's opinion, not a new commitment. His comment comes as the government prepares to unveil its strategic defence review which will outline priorities for the military and security spending in the coming this year the Prime Minister, Sir Keir Starmer, laid out plans to increase defence spending to 2.5% by April 2027, with a "clear ambition" to reach 3% by 2034, economic conditions allowing. But it is understood that the strategic defence review, to be published on Monday, is based on the assumption that the 3% target is the trajectory spending will follow, with the possibility projects could be delivered faster if the target were brought review will state that the world and the threats the country faces are changing fast. It will recommend the deployment of new "digital" experts alongside troops to protect them from enemy drones and to control the army's own, future, unmanned to the Times newspaper, Healey said the UK defence spending target allowed the UK to "plan for the long term... [and] deal with the pressures".As a result of the review, the Ministry of Defence will spend more than £1bn to develop technology to speed up decisions on the heads of government are set to meet in The Hague, in the Netherlands, next month, where it is expected that its secretary-general will call on allies to increase defence this month, while addressing the alliance's parliamentary assembly, Mark Rutte suggested that the 32 member countries agree on a "high defence spend target of, in total, 5%".New money for defence will be found in part by reducing UK overseas aid from 0.5% of gross national income to 0.3%.The cut in aid prompted International Development Minister Anneliese Dodds to resign in February, telling the prime minister in a letter that the move would "remove food and healthcare from desperate people - deeply harming the UK's reputation".
Daily Mail
3 hours ago
- Daily Mail
BORIS JOHNSON: Like an alcoholic reaching for the bottle, Labour are addicted to a greedy gulp of the old tax and spend - and they'll give us a hangover that will last for decades
Watching the Labour Government trying to manage the UK economy is like watching an alcoholic trying to deal with a lifetime of addiction. They know the bottle of whisky is there in the cupboard. It's called the old tax and spend. They know that they love the taste of it – the rush of that first glug – but they also know deep down that just unscrewing the cap of that bottle is going to be a disaster, for them and for their families.
