CAR manufacturer Nissan is to switch production of the successor to its highly successful Micra model away from its plant in the North-East, according to reports at the weekend.

Despite being hailed as one of Europe's top car factories, the plant at Washington, near Sunderland, will not be used for the new model, which is due to be launched in two years' time.

It is expected that the company will make an announcement on the future of the plant, which employs about 4,200, next month.

It is not thought that the decision will mean large job losses, as the company plans to further increase production of the Qashqai, which has sold 130,000 since its European launch in March last year.

A third production shift is being set up next month that is expected to employ 800 people. The company received 4,000 applications in only two weeks.

The plant was set up in 1984, giving the Japanese company an entry into the European car market - at the time there were restrictions on trade - and also providing a badly-needed jobs boost to the region. At the time, unemployment was high due to the demise of traditional industries such as shipbuilding.

The Nissan plant, which is responsible for one-fifth of the total car production in the country and has produced more than four-and-a-half million cars since production began, has also brought supplier companies to the region.

Chief executive Carlos Ghosn is reported to have said last week: "There will be changes at Sunderland. The plant is efficient and, with the pound declining, becoming more cost-competitive. The Micra is competing against cars made in low-cost countries. It is not profitable in Europe, but the Qashqai is."

In recent years, Nissan has been concerned about the high value of the pound against the Euro and favoured Britain joining the European currency, but its value has fallen considerably this year.

Tomorrow, Mr Ghosn is due to present Nissan's next five-year plan at the company's headquarters in Tokyo.

The firm is the region's largest private employer and spends more per head on staff than the average for British industry.

4:03am Monday 12th May 2008

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