Nissan to produce electric cars in Britain

Nissan will on Monday make an announcement on electric car production in Britain - the second of its kind by a global automaker in less than a week.

Toyota yesterday confirmed plans to build a hybrid petrol-electric version of its Auris hatchback in Burnaston, Derbyshire, from the middle of next year.

Nissan would not comment on its plans ahead of Monday's announcement. However, industry sources said it concerned electric cars, which the Japanese carmaker and its partner Renault plan to launch in the US and Japan from next year and globally from 2012.

In April the European Investment Bank approved up to €400m ($565m, £345m) for Nissan - to be split between its operations in Britain and Spain - for the "accelerated introduction in the market of low-carbon-emission vehicles".

Nissan is Britain's largest carmaker by production volume. Its plant in Sunderland in north-east England has 4,200 employees and is the region's largest single-site employer.

Lord Mandelson, the business secretary, is due to address Nissan's employees on plans to create a "low-carbon economic area" in the north-east, including a research and development centre and technology park for automotive suppliers.

The government's policies on the car industry were criticised this week by MPs as Jaguar Land Rover, Britain's biggest luxury car producer, announced more job cuts.

The House of Commons business and enterprise committee yesterday slammed the government for failing to have disbursed "one single penny" from its £2.3bn automotive assistance programme announced in January.

Jaguar Land Rover remains locked in long-running talks with the government on state guarantees for a £340m loan the company says it needs to develop lower-emission cars. The company said this week that it was cutting 300 more jobs as it discontinues production of its X-Type model in Halewood, -Merseyside.

Speaking at Toyota's plant yesterday, Lord Mandelson said that the government's low-carbon strategy, launched this week, would "set out to make Britain the best place in the world to develop low-carbon vehicles". Ministers also want General Motors to produce its battery-powered Volt in the UK.

Toyota said the hybrid Auris would safeguard 400 jobs at Burnaston and Deeside, North Wales, where engines for the cars will be produced.

Toyota is one of several large manufacturers based in or near Derby that have fuelled above-average growth in incomes and the local economy. However, the cluster has been weakened by the recession and by the government's decision to award a large order of trains to a consortium led by Hitachi of Japan rather than to a Derby factory owned by Bombardier of Canada.

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