Page last updated at 00:24 GMT, Thursday, 18 March 2010

Analysis: Why Nissan Sunderland got the Leaf

By Jorn Madslien
Business reporter, BBC News

Nissan chief executive Carlos Ghosn with the Nissan Leaf
The Leaf is Nissan's first all-electric car

Nissan had already said that it would invest some 200m euros in a battery factory near its Sunderland manufacturing plant, yet it was never a given that the company would produce its Leaf electric car here too.

Its investment in the region is now set to be doubled.

The North East's efforts to gear up its electric motoring infrastructure and the UK government's recent decision to subsidise buyers of electric cars to the tune of £5,000 obviously helped the Japanese automotive giant make up its mind.

The currently weak pound, which makes it cheaper for foreign firms to invest here and easier to export from here, will also have weighed on Nissan's chief executive Carlos Ghosn's mind.

But in the end, the right to produce the car and thus securing thousands of jobs in an otherwise economically depressed region was earned by the Nissan factory's management and workers.

Their efforts since the factory was opened in the mid-80s had already earned the factory a reputation as a particularly efficient car factory, as well as a role as the UK's biggest exporter.

Thousands of jobs could be created in the region's supply sector

But efficiency alone was not enough to convince the Japanese parent company to transform Sunderland into the largest electric car plant in Europe.

Mr Ghosn will also have been impressed by the company's close relationship with local suppliers and with its ability to support new ones as part of its move towards electric motoring.

Thousands of jobs could be created in the region's supply sector as a result of Nissan deciding that the UK should be its main supplier of electric cars for European drivers.

Nissan's European investment is also supported by the European Investment Bank, which last year gave the green light to a £380m loan aimed at assisting the company's efforts to come up with zero-emission motoring technology.

The widespread and complex support initiatives from organisations such as the EIB, from governments and from local governments suggests that as various car scrappage schemes run out the industry has found another mechanism for public money to be channelled into their coffers.

But as policy makers will get jobs and emission reductions in return, this may well prove to be money well spent.

Besides, the motor industry is also doing its bit.

Nissan and its alliance partner Renault are between them investing some 4bn euros in electric motoring, which Mr Ghosn, who is chef executive of both firms, believes will account for about a 10th of the global car market in a decade.

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