Nissan will begin making its luxury Infiniti cars in Sunderland this week as part of a £250m investment in the factory, a landmark move that heralds a massive triumph for British industry.

For the first time, the Japanese carmaker has chosen to build an upmarket model in Europe, a decision that represents a huge vote of confidence in the north-eastern factory, which has become one of the country’s biggest manufacturing success stories.

Sunderland is now the most productive car plant on the Continent, with vehicle output dwarfing that of the whole of Italy. Every Sunderland worker makes an average of 118 cars a year and the factory has been at its 500,000- unit annual capacity since 2011. In Italy, 401,317 cars were built last year.

Production of the Infiniti Q30 hatchback, designed to compete with other “luxury compact” cars such as the Mercedes GLA, BMW 1 Series and Audi A3, is expected to result in an additional 60,000 vehicles rolling out of the factory doors, providing a big boost to the area’s workforce and skills base.

As production of the Q30 begins, Nissan is expected to say that several hundred new positions have already been created at the factory to expand the production lines in order to ramp up activity, taking total employment to more than 6,700. As many as 4,000 workers have been retrained to help to build the new model, and a further 1,000 additional jobs have been generated among Nissan suppliers in the local area.

It follows the carmaker’s recent decision to assemble its successful Juke model in Britain. The Sunderland plant fought off competing claims from other parts of the Japanese manufacturer’s empire, including its Barcelona operations and underutilised facilities around France owned by Renault, its partner company.

David Fuller's view

Here is a PDF of the Telegraph's article.

Nissan’s expansion in the UK is timely for the country, give all the talk about possible Grexit uncertainty.  There can be a herd instinct among foreign corporations in terms of their location or relocation policies for international development.  Nissan’s decision is a boost for the UK economy. 

Nissan Motor’s ranging recovery since the 2009 lows is impressive.  The share is temporarily overextended having recovered steadily from its August and September lows, and some reaction and consolidation near the March to July highs would not be surprising.  Thereafter, the competitive valuation (est p/e 9.85 and yield 3.20%) should support further gains over the medium term.