THE North-East's car making industry would be dealt a major blow if the UK severs ties with the European Union (EU), a report has warned.

The Society of Motor Manufacturers and Traders (SMMT) says the region's car manufacturing sector, spearheaded by Sunderland-based Nissan, remains heavily reliant on the UK staying in the EU.

Nissan made more than 500,000 vehicles at its Wearside plant last year, with seven out of ten exported to Europe.

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The report comes after Nissan, which employs more than 7,000 North-East workers, previously backed calls from deputy prime minister Nick Clegg for the UK to stay in the EU.

Toshiyuki Shiga, Nissan vice-chairman and former chief operating officer, said: “From a foreign investor point of view, I hope the UK will remain as an EU member.

“A lot of regulations are under the EU, and if the UK after leaving the EU made unique regulations and standards, that would be an obstacle for us.”

Angelika Schneider, Liberal Democrat North-East Euro-candidate, said the UK's position as a base for car making was underpinned by its place within the EU.

She added: “With seven out of ten Sunderland-made Nissan cars being exported to the rest of Europe, it is self-evident that leaving the single market would have serious consequences for local business.”