Nissan announce £125m UK investment programme

Japanese car giant Nissan praised the workforce at its UK plant today after announcing plans to build a new model under a £125 million investment programme, creating 2,000 jobs.

The vehicle will be built at the Sunderland plant from mid-2013 in a project supported by a £9.3 million grant from the Government, and will compete with models in the so-called B segment such as the Ford Fiesta and the VW Polo.

Business Secretary Vince Cable hailed the news as a “clear vote of confidence” in this country's manufacturing industry, while a union leader said the announcement was a “ray of sunshine”.

The workforce at Sunderland, where Nissan first started producing cars in 1986, will increase by 400 to a record 6,000, while thousands of jobs will be created among firms supplying the factory.

It is expected that the new model, with a current concept name of Invitation, will have an initial production run of 100,000 a year, helping to cement Sunderland as the largest car plant in the UK - a position it has held for the last 14 years.

In 2011, the plant's 25th anniversary year, Sunderland set a new production record with more than 480,000 models rolling off the lines.

Trevor Mann, Nissan's senior vice president for manufacturing in Europe, said: “This plant has a 20-year heritage in producing successful compact cars stretching back to the first Micra rolling off the line in 1992.

“I'm delighted that Sunderland has secured what will be another very important model for Nissan in Europe. It is a testament to the workforce, the ongoing support from the UK Government and all of our regional partners and suppliers.

“The additional volume will maintain Sunderland as the country's largest car plant and we expect and look forward to a very busy future.”

Mr Mann, speaking from the Geneva Motor Show, where the new car was officially unveiled, told the Press Association there had been “competitive bidding” from other Nissan plants across the world to build the new car, praising efficiency levels at Sunderland.

“Production rates are very high and the plant has made year-on- year improvements for several years. It is one of Nissan's most productive plants globally.”

Mr Mann admitted that the firm had some problems recruiting multi-skilled technical workers, but said it was increasing the number of apprentices it takes on.

Mr Cable said: “It is fantastic news that Nissan will be building the new model in Sunderland. The investment is a boost for jobs at Nissan's plant as well as the wider supply chain.

“This latest announcement highlights the UK's track record of attracting inward investment. Global vehicle manufacturers are beating a path to the UK's door. They recognise that the Government values the automotive sector.

“Nissan was able to push on with developing this latest project thanks to the Regional Growth Fund offer.”

Nissan is one of several businesses in the automotive sector to receive conditional offers from the £2.4 billion Regional Growth Fund (RGF), which aims to support projects that will create jobs in areas of England dependent on the public sector and which are supported by private investment.

Paul Everitt, chief executive of the Society of Motor Manufacturers and Traders, said: “Nissan's commitment to manufacture the all-new Invitation at its Sunderland plant is another vote of confidence in the UK auto industry and excellent news for the broader economy.

“The UK remains a globally competitive base for automotive manufacturing with its highly-skilled, flexible workforce and advanced productivity levels continuing to attract major international investment. Growth in manufacturing is leading the current recovery and clearly demonstrating the benefits of a rebalanced economy.”

Nissan produced more than 480,000 vehicles at its Sunderland plant last year, up 14% from 2010 and a new record for a single UK car plant, largely down to the success of its Qashqai model.

The Sunderland plant also makes the Juke and Note models.

Tommy Brennan, regional official of the GMB union, said: “This is really good news for the North East and all the suppliers to Nissan where GMB members work. It is a ray of sunshine.”

Nissan established its Sunderland plant in 1984 and production began two years later, with total investment since then now reaching £3.3 billion.

More than 6.4 million cars have been built at the factory, with 80% of production exported to 97 markets worldwide.

Current models are Qashqai, Qashqai +2, Juke and Note, and the site currently employs around 5,400 workers.

Production of the 100% electric Nissan Leaf begins in 2013.

Nissan also employs 50 staff at its European Design Centre in London and 500 at its European Technical Centre in Cranfield, Bedfordshire.

Mr Cable, who was in Geneva for the announcement, will address a conference in London organised by the EEF manufacturers' organisation later today and is expected to say: “The decision is another clear vote of confidence in Britain's manufacturing industry, and vindicates the Government's decision to put support for manufacturing at the core of its economic strategy. In this case, only £1 of public sector Regional Growth Fund money can leverage in £15 of private money.

“Manufacturing makes a disproportionately large contribution to productivity growth in the UK, it generates half our exports and it is responsible for much of the business research and development in this country. So providing the right framework of incentives and support will have a material effect on future rates of economic growth.

“A generation ago the automotive sector appeared to be in irreversible decline, beset by strikes and poor management, but today it is a sector transformed.

“Labour relations are constructive, even when tested during the recession. Companies and university research teams are working together on new technologies. The Government is helping the industry to address skills gaps by funding apprenticeship places, including higher apprenticeships at degree level.

“Over 40 companies manufacture vehicles in the UK, ranging from global volume car and bus builders to specialist, niche marques. Over 3,000 companies, directly employing 135,000 people, operate in the sector, generating over £10 billion for the UK economy annually - and the related retail and service sector adds a further £22 billion.”

The North East Chamber of Commerce's director of membership and policy, Andrew Sugden, said: “I would like to congratulate Nissan Motors UK and its dedicated workforce on yet another major coup for the Wearside plant.

“Nissan is one of the North East's blue chip companies. For quarter of a century it has established a reputation for excellence and continuous improvement, regularly smashing its own production records.

“The unparalleled level of performance from the Wearside workforce can only have served to convince Nissan's senior management that Sunderland is the perfect place to oversee production of this new vehicle.

“The importance of Nissan to the regional economy cannot be under-estimated. For every person employed by the company another four are supported in Nissan's supply chain and with employment at the plant reaching a record high this is another welcome achievement.

“With the Sunderland plant set to launch Nissan's first lithium-ion battery production facility outside Japan and preparations well under way for the start of Nissan Leaf production in 2013, the year ahead looks incredibly exciting for the company.”

AP