Against a backdrop of a struggling Europe, government incentives have helped grow the UK’s production base
Nissan has announced that it intends to build a new compact car at its plant in Sunderland (United Kingdom) for the Infiniti brand. The company said that the plan will involve the investment of a further GBP250 million (USD329.6 million) in the plant, which will to enable it to build the vehicle from 2015 at a rate of around 60,000 units per annum (upa). The site will be the only location to build this model.
The investment is expected to create around 1,000 new jobs in the UK. . The company also revealed that the new Infiniti would also take benefit from its UK operations during the design and development process which will take place at Nissan's London (United Kingdom) design centre and its European Technical Centre based in Cranfield, Bedfordshire (United Kingdom). Because of limitations in capacity at the Sunderland facility, Nissan now intends to build a new C-segment hatchback announced in April elsewhere.
The sourcing for this vehicle is to be decided at a later date, creating new opportunities for suppliers looking to invest. The number of investments in new vehicle production in the UK has created a number of issues down the supply chain, particularly with regard to a lack of suppliers with facilities there. UK-based car manufacturers have identified GBP3 billion a year (USD4.5 billion) that they would spend with local suppliers were it not for a lack of local production capacity.
Whilst European production and sales are down across the board, vehicle production in the United Kingdom grew by 4.3% year-on-year (y/y) during November, according to the latest data published by the Society of Motor Manufacturers and Traders (SMMT). Output during the month increased to 153,799 units as production of passenger cars increased by 4.9% y/y to 142,825 units.
However, while export growth has been lower recently, domestic demand has gone some way to offset this with an over 30% y/y improvement in sales of locally produced vehicles. The long-term prospects for the sector suggest that it is in the best shape for many years. IHS Automotive anticipates that 2012 light-vehicle production in the country will witness a 6.6% y/y rise compared with 2011 to 1.54 million, and while a decline in anticipated during 2013 with more substantial gains being seen by the second half of the decade.
The decision to make an Infiniti at this plant comes as no surprise, as there has been speculation for almost a decade that this could take place. However, having earmarked a vehicle which would have shared architectural technology with other vehicles being built there, it has obviously created a viable plan to build this vehicle which is expected to use Daimler's MFA platform which underpin the recently introduced Mercedes A-Class and B-Class and their upcoming siblings.
Certainly, it may well have been attracted by the margins that such a vehicle could offer, particularly when taking into account the pressure that mass-market C-segment hatchbacks come under in the market place. Although it has yet to decide where this now usurped vehicle will be built, it would come as little surprise if it ended up being manufactured at Nissan's soon to be expanded site in Mexico.
The investment increases Sunderland’s production hub, which is now easily the largest vehicle manufacturing site in the UK. It is also the latest to be announced during the past several years. Expenditure includes that into the manufacturing of the Leaf electric vehicle (EV) as well as a battery plant at the site. It also announced that it would be investing in the manufacture of the next-generation Qashqai SUV, which has driven growth at the site in recent times. More recently it also announced that it will build a new premium B-segment hatchback model at Sunderland, based on the Invitation concept displayed at the Geneva Motor Show in 2012.
Copyright © 2025 S&P Global Inc. All rights reserved.
These materials, including any software, data, processing technology, index data, ratings, credit-related analysis, research, model, software or other application or output described herein, or any part thereof (collectively the “Property”) constitute the proprietary and confidential information of S&P Global Inc its affiliates (each and together “S&P Global”) and/or its third party provider licensors. S&P Global on behalf of itself and its third-party licensors reserves all rights in and to the Property. These materials have been prepared solely for information purposes based upon information generally available to the public and from sources believed to be reliable.
Any copying, reproduction, reverse-engineering, modification, distribution, transmission or disclosure of the Property, in any form or by any means, is strictly prohibited without the prior written consent of S&P Global. The Property shall not be used for any unauthorized or unlawful purposes. S&P Global’s opinions, statements, estimates, projections, quotes and credit-related and other analyses are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold, or sell any securities or to make any investment decisions, and do not address the suitability of any security, and there is no obligation on S&P Global to update the foregoing or any other element of the Property. S&P Global may provide index data. Direct investment in an index is not possible. Exposure to an asset class represented by an index is available through investable instruments based on that index. The Property and its composition and content are subject to change without notice.
THE PROPERTY IS PROVIDED ON AN “AS IS” BASIS. NEITHER S&P GLOBAL NOR ANY THIRD PARTY PROVIDERS (TOGETHER, “S&P GLOBAL PARTIES”) MAKE ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE PROPERTY’S FUNCTIONING WILL BE UNINTERRUPTED OR THAT THE PROPERTY WILL OPERATE IN ANY SOFTWARE OR HARDWARE CONFIGURATION, NOR ANY WARRANTIES, EXPRESS OR IMPLIED, AS TO ITS ACCURACY, AVAILABILITY, COMPLETENESS OR TIMELINESS, OR TO THE RESULTS TO BE OBTAINED FROM THE USE OF THE PROPERTY. S&P GLOBAL PARTIES SHALL NOT IN ANY WAY BE LIABLE TO ANY RECIPIENT FOR ANY INACCURACIES, ERRORS OR OMISSIONS REGARDLESS OF THE CAUSE. Without limiting the foregoing, S&P Global Parties shall have no liability whatsoever to any recipient, whether in contract, in tort (including negligence), under warranty, under statute or otherwise, in respect of any loss or damage suffered by any recipient as a result of or in connection with the Property, or any course of action determined, by it or any third party, whether or not based on or relating to the Property. In no event shall S&P Global be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees or losses (including without limitation lost income or lost profits and opportunity costs or losses caused by negligence) in connection with any use of the Property even if advised of the possibility of such damages. The Property should not be relied on and is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment and other business decisions.
The S&P Global logo is a registered trademark of S&P Global, and the trademarks of S&P Global used within this document or materials are protected by international laws. Any other names may be trademarks of their respective owners.
The inclusion of a link to an external website by S&P Global should not be understood to be an endorsement of that website or the website's owners (or their products/services). S&P Global is not responsible for either the content or output of external websites. S&P Global keeps certain activities of its divisions separate from each other in order to preserve the independence and objectivity of their respective activities. As a result, certain divisions of S&P Global may have information that is not available to other S&P Global divisions. S&P Global has established policies and procedures to maintain the confidentiality of certain nonpublic information received in connection with each analytical process. S&P Global may receive compensation for its ratings and certain analyses, normally from issuers or underwriters of securities or from obligors. S&P Global reserves the right to disseminate its opinions and analyses. S&P Global Ratings’ public ratings and analyses are made available on its sites, www.spglobal.com/ratings (free of charge) and www.capitaliq.com (subscription), and may be distributed through other means, including via S&P Global publications and third party redistributors.
