UPDATE 1-Nissan scraps plan to build new X-Trail model in Britain

Carmaker Nissan has scrapped plans to build its new X-Trail SUV in Britain, saying it had taken the decision to consolidate production in Japan and warning two months before Brexit that uncertainty was making it harder to plan for the future. Nissan said four months after Britain voted to leave the European Union in June 2016 that it would manufacture the new X-Trail in Britain, which was seen as a major vote of confidence in the country and then new Prime Minister Theresa May.

A source told Reuters that Nissan received a letter from the government at the time promising extra support in the event that Britain's departure from the European Union hit the competitiveness of its north of England Sunderland plant. But on Sunday, Nissan, which operates Britain's single-biggest car factory where it builds roughly 30 percent of the country's 1.52 million cars, said it was reversing that decision.

"The company has decided to optimise 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 Europe Chairman Gianluca de Ficchy.

The company said planned investment in the next-generation Juke and Qashqai, also announced in 2016, was unaffected. Last year Nissan cut hundreds of jobs at the Sunderland factory in response to declining demand for diesel models. Production at the site fell 11 percent in 2018. (Reporting by Costas Pitas, Editing by Kylie MacLellan and Janet Lawrence)