The Japanese carmaker Nissan said yesterday that it is investing more than £200m at its Sunderland factory in a move that it said would create 200 jobs and safeguard a thousand others.
The plant has been chosen to build Nissan's new four-wheel drive compact-crossover car - part people carrier, part hatchback - which was designed and developed in the UK.
The decision comes less than six months after Nissan said it would build the Tone mini people carrier - backed by £124m of investment - at Sunderland, which is regarded as the most efficient car plant in Europe.
Yesterday's announcement is the second boost for Britain's car industry in less than a week. On Monday the German carmaker BMW confirmed a multimillion pound investment at its Oxford plant to increase production of its fast-selling Mini.
The trade and industry secretary, Patricia Hewitt, who was in Sunderland for the announcement yesterday, said Nissan's decision "demonstrates why the UK remains the preferred location in Europe for automotive investment and why the UK continues to be at the forefront of advanced vehicle design and technologies."
The news that the UK government is to contribute £5m in regional selective assistance is likely to play less well in Brussels, however. The competition commissioner, Neelie Kroes, is questioning whether poorer regions within rich EU countries should receive such state aid - an approach which has put her at loggerheads with the UK, Germany, France and Austria.
The Department of Trade and Industry said yesterday that the Nissan announcement underlined the importance of selective regional assistance. "It has helped underpin 1,000 jobs at Nissan and numerous others in the supply chain."
The Sunderland plant currently employs about 4,100 and produces about 320,000 vehicles a year.
However, the addition of the Tone, which will come into production next January, and the P32L - as the new 4x4 has been codenamed - which will start rolling off the production lines at the end of next year, could increase the total to 400,000.
Colin Dodge, senior vice-president for manufacturing at Nissan Europe, said: "Production of the P32L is a good decision for the company given our employees' track record of handling the complexities of manufacturing multiple vehicles."
Though integrating the new model into the plant's production would be a challenge "this is the sort of challenge any plant would welcome".
The trade union Amicus welcomed the announcement. Tony Murphy, national officer for the automotive industry, said: "Nissan has demonstrated that when UK manufacturing receives the right levels of investment it can shine above the rest."
