Nissan has reversed a decision to build the new X-Trail SUV at its Sunderland plant in the United Kingdom, and decided instead to build it in Japan.
The decision, announced over the weekend, is a further blow to the British motor industry which is already stuggling to cope with the uncertainty surrounding Britain's exit from the European Community.
The company said in 2016 it would build the high-volume selling vehicle at the Sunderland plant, but now it says the vehicle will be built at its Kyushi plant in Japan, and in North America.
The dramatic decline in sales of diesel models in Europe is one of the reasons for the move, along with problems around meeting tough new environmental regulations in Europe.
“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”, Gianluca de Ficchy, Nissan’s Europe chairman, said in a statement.
The previous head of Nissan, Carlos Ghosn, received assurances from the UK Government in 2016 that the plant's operating conditions would not change after Brexit.
Nissan employs around 7000 people in the UK, most of them at the huge Sunderland plant.
However if the UK leaves the European Community without an agreed exit dea, imports and exports to Britain will face tarrifs and border checks.
Nissan has already pledged to eliminate diesel models from its line-up, saying it will not launch another new disel vehicle after 2021.
The Financial Times said the company had struggled to make the new diesel cars compliant with the latest emission rules using diesel engines that it buys from Renault, and fears of an accelerating decline of the fuel source among the public coloured its decision.
Nissan laid off hundreds of workers from Sunderland last year because of the decline in sales of diesel models.
The company's sales in Europe fell by 14 per cent last year to 473,810 vehicles.
Nissan produced more than 442,000 vehicles at the Sunderland plant last year, 10 per cent fewer than the previous year.
Nissan said production of the next-generation Juke and Qashqau would take place at Sunderland, which is said was the second biggest car plant in the UK.
It said current production in Sunderland also included the Nissan LEAF, Europe's best-selling electric car, which reached a record 46,989 production last year, up 177% from the previous year.