The Japanese carmaker announced yesterday the vehicle would be built exclusively in Japan, going back on a pledge made two years ago which would have seen it produced at the company's plant in Sunderland in the North East.
Merkel said questions about the backstop could be discussed in the so-called political agreement that accompanies the Brexit deal, adding: "We need to show creativity, we need to listen to each other".
The British government says that if Nissan wants their financial support, the company will have to reapply based on a new investment strategy.
The letter said: "It will be a critical priority of our negotiations to support United Kingdom vehicle manufacturers, and ensure their ability to export to and from the European Union is not adversely affected by the UK's future relationship with the EU". The condition was that Nissan manufactured the X-Trail and the Qashqai here, and continued to do so after Brexit.
"We will set our ambitions high and vigorously pursue continued access to the European market as an objective in future negotiations".
Nissan's decision not to build its new X-Trail vehicle at its factory in Sunderland in northeast England was "very disappointing", he said, adding however that the company had confirmed no jobs would be lost as a result.
"The continued uncertainty around the UK's future relationship with the European Union is not helping companies like ours to plan for the future", de Ficchy said.
The world's biggest free trade deal came into force on 1 February and there are fears that Japan will stop using the United Kingdom as a manufacturing base, especially with a 0% tariff on auto imports built into the EU-Japan agreement. We now know the X-Trail won't be manufactured here after Brexit (though the Qashqai should continue to be), yet Nissan has already pocketed £2.6m.
On Feb. 1, an EU-Japan free trade agreement also kicked in, which includes the EU's commitment to removing tariffs of 10 percent on imported Japanese cars, diminishing part of the business case for building in Europe. Brexit uncertainty has since prompted consternation in some boardrooms in Tokyo.
It is another sign of the decline of British automotive manufacturing, on which Fleet Europe reported last week.
The company said planned investment in the next-generation Juke and Qashqai, also announced in 2016, was unaffected.
Following the announcement, Clark said it would be "a blow to the (country's automotive) sector and the region".
Nissan has become the latest corporate big-hitter to slash investment in the face of heightened economic uncertainty and a potential no-deal Brexit.