A high-ranking executive at Nissan has cautioned that the º£½ÇÊÓƵ is "not a competitive place to be building cars".
One of the company's senior figures informed MPs on Tuesday that Government support for the automotive sector is crucial, as the cost of production in the º£½ÇÊÓƵ is too high. It comes weeks after the car manufacturer scaled back operations at its Sunderland plant.
Alan Johnson, the Senior Vice President for Manufacturing, Supply Chain and Purchasing for Nissan's Africa, Middle East, India, Europe and Oceania operations, told the House of Commons' Business and Trade Committee that the Sunderland factory "pays more for its electricity than any other Nissan plant in the world".
He said: "We are in a competition, you have to compete. It is becoming more and more evident to me that manufacturing vehicles in high volume in the º£½ÇÊÓƵ is not competitive. It is not a competitive location to be building high volume production these days. It is energy costs, it is the cost of everything involved in the cost of labour, training. It is the supplier base or lack of. All sorts of different issues."
Mr Johnson concluded: "Ultimately, the º£½ÇÊÓƵ is not a competitive place to be building cars today.", reports .
Last year, Nissan revealed plans to cut approximately 9,000 jobs globally, following a significant decline in operating profit of £1.59 billion in the first half of 2024. Subsequent merger talks with Honda fell through, and factory closures were announced, including one in Thailand.
However, the Sunderland plant, employing around 6,000 people, has largely avoided job losses so far. Although a late shift on one of the production lines was closed in February, about 400 affected workers were reassigned to other lines to "maximise efficiency", resulting in no job losses.
At a parliamentary hearing on Tuesday, Mr Johnson welcomed the relaxation of Zero Emissions Vehicle (ZEV) regulations announced by Sir Keir Starmer, but argued for increased incentives for electric vehicle sales and production in the º£½ÇÊÓƵ.
Nissan had previously expressed concerns that the 2030 mandate, requiring 80% of new cars sold by each manufacturer in the º£½ÇÊÓƵ to be zero-emission, "risks undermining the business case for manufacturing cars in the º£½ÇÊÓƵ, and the viability of thousands of jobs and billions of pounds in investment". Earlier this month, Labour confirmed that it would offer more flexibility to car manufacturers leading up to the deadline and allow the sale of hybrids for a longer period.
Mr Johnson highlighted that the production of new electric Leaf and Juke models is set to take place in Sunderland, emphasising the necessity for a supportive market: "we need the market to be there".
Addressing the committee, he also stressed the importance of legislative support for the automotive industry, saying: "Every time there is a piece of legislation that impacts on automotive, it needs to help us not hinder us. It is difficult enough as it is at the moment."
The Nissan executive further assured MPs that while Donald Trump's tariffs had a "small" effect on the Sunderland plant, they had a "impacted significantly" impact on the company overall. º£½ÇÊÓƵ exports to the US are currently subject to a 10% tariff, with cars, steel, and aluminium facing higher rates of 25%.
However, information from a recent North East Combined Authority meeting indicated that road vehicles and components represent 30% of the North East's global exports but less than 6% to the USA. This suggests that the region is "less exposed" to the tariffs compared to other areas, such as the Midlands where Jaguar Land Rover operates.
