Nissan changes gear with £200m for Sunderland plant

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The Independent Online

Nissan, the embattled Japanese car manufacturer, yesterday delivered a huge vote of confidence in its Sunderland plant by announcing a £200m investment in the site to produce a new family-sized car.

Nissan, the embattled Japanese car manufacturer, yesterday delivered a huge vote of confidence in its Sunderland plant by announcing a £200m investment in the site to produce a new family-sized car.

The boost for the North-east came just three days after the parent company announced 21,000 job losses in Japan, the closure of five plants and a 15 per cent reduction in domestic production capacity as part of a £6bn cost-cutting plan.

The new model will be the successor to the current Primera and is expected to go into production in 2003. The investment, which is being supported by £5m in regional aid from the Department of Trade and Industry, will increase output from Sunderland to almost 400,000 cars a year.

Nissan's total investment to date in Sunderland has been £1.5bn. Its faith has been repaid by the site being named the most productive car plant in Europe for three years in succession. Last year it achieved an output of more than 100 cars per man for the first time.

Stephen Byers, Secretary of State for Trade and Industry, welcomed the news as "a vote of confidence in the workforce and in the UK as a place to manufacture and invest".

John Cushnaghan, managing director of Nissan Motor Manufacturing UK, said the investment had been won by the Sunderland workforce's commitment to quality and determination to be the best in the world.

Production at Sunderland will rise from about 285,000 this year to 360,000 next year with the launch of a third model, the Almera, at the plant in January.

Confirmation that the new Primera is be to be built at Sunderland will also come as a boost to the company's 128 UK component suppliers. Nissan's total component spend is about £1.3bn a year. The current Primera generates £600m worth of orders a year for Nissan's 205 European suppliers.

The announcement of the new Primera was delayed because of the sensitivity of unveiling fresh investment in the UK just as Nissan was cutting back its domestic operations savagely.

However, a spokesman insisted that it was not a case of Nissan in Japan losing out to overseas production plants. When the Almera goes into production next year, Nissan will be sourcing 90 per cent of its European sales from European production plants.

There has been speculation that Nissan is looking for government aid of up to £100m for Sunderland. But this would be to help expand production further. The next model to be produced from Sunderland would be a replacement for the Micra, likely to be built on the same platform as the next new small car from Renault, which now owns a 38 per cent stake in Nissan.

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