London (CNN) Japanese car manufacturer Nissan has confirmed it is scrapping plans to build a new model in the English city of Sunderland, citing uncertainty over Brexit and further highlighting employers' fears of a no-deal departure by the UK from the European Union.

The company had said in 2016 that it would produce the new X-Trail model at its Sunderland factory after getting reassurances from the government over Brexit -- an intervention hailed by Prime Minister Theresa May as a "vote of confidence" in British business after voters backed leaving the EU.

Now it's reversed those plans and will instead continue to build the X-Trail in Japan, it confirmed on Sunday, dealing a major blow to the region's economy and underlining repeated concerns from the British automotive industry over damage to the sector caused by Brexit.

"The continued uncertainty around the UK's future relationship with the EU is not helping companies like ours to plan for the future," Nissan's Europe chairman Gianluca de Ficchy said in a statement, after explaining that keeping production in Japan would reduce "upfront investment costs."

The decision was quickly seized upon by anti-Brexit MPs and campaigners, and places further pressure on May as she seeks to salvage her withdrawal agreement with the EU and pass it through parliament.

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