Nissan is investing £125m ($196m) to add a new model to its UK plant Sunderland next year based on the compact Invitation hatchback concept revealed at the Geneva Motor Show this week, with an estimated initial output of 100,000 vehicles.
The project is also supported by a £9.3m investment grant offer from the UK Government's Regional Growth Fund.
The new model will be built alongside the Juke crossover and will fill production capacity left by the outgoing Note model which is also made in Sunderland.
Sunderland also produces the Qashquai/Qashquai+2 and is the UK's largest vehicle plant.
"I'm delighted that Sunderland has secured what will be another very important model for Nissan in Europe," said Trevor Mann, Nissan senior vice president for Manufacturing in Europe. "It is a testament to the workforce, the ongoing support from the UK Government and all of our regional partners and suppliers. The additional volume will maintain Sunderland as the country's largest car plant and we expect and look forward to a very busy future."
As well as a boost to companies supplying the Nissan plant and secure 2,000 jobs-400 at the plant and a further 1,600 across the supply chain-assembly of the Invitation-based model promises sustained demand for logistics services.
The nearby port of Tyne, where Nissan operates a car terminal and which exported a record number of Nissan vehicles last year, has been quick to welcome the news. Its CEO, Andrew Moffat, said: "This is more welcome news from Nissan and the port of Tyne is delighted to play a part in Nissan's continuing success by ensuring the company can get its cars to market very quickly and efficiently, helping to make it highly competitive across the world."
The port of Tyne also serves a consolidation hub for Renault and Nissan output from France, Spain, Mexico and the UK before the vehicles are shipped to Russia.
The port's growing logistics business also handles the import and warehousing of car parts supporting the Sunderland plant's just-in-time processes.
Yusen Logistics (formerly NYK Logistics), which handles inbound logistics services to Sunderland, is also likely to benefit from the additional production.
The company's pan-European automotive network is now making Nissan collections from the French/German border to the Russian border, as well as Turkey, using its inhouse crossdock infrastructure in the Czech Republic, Germany and Italy.
It currently involves between 10-12 inbound trailer movements per week between the crossdocks in Germany and the Sunderland plant.
Benefits of monzukuri
Nissan's Sunderland plant is well-placed to incorporate the latest production and logistics demands of the new model following its implementation of the monozukuri manufacturing principle, which takes a wider view of the total supply chain into production considerations, including purchasing and logistics, in an effort to improve total delivery cost.
Besides vehicle assembly, Nissan will carry out axle production, cylinder head casting, camshaft machining and engine assembly at the Sunderland complex.
The new vehicle is likely to be one of first vehicles developed under Nissan's Common Module Family concept, designed to use common parts across different vehicle segments in an effort to cut costs by nearly 30%. The carmaker said recently that vehicles made under the CMF strategy, which will double the use of common parts in the next generation of its vehicles to around 80%, would enter the marketplace from 2013.
CMF entails the use of four modules-engine compartment, cockpit, front underbody and rear underbody-as well as the architecture for electronic components, with each module having appropriate variations. Vehicles are designed by combining these modules in different ways.
Asked what sort of volume efficiencies are expected from the introduction of the CMF concept and how will this translate into savings in the supply chain and logistics expenditure Nissan would only state that "with the growth in the scale of mass production, there is a need to ensure that quality management and robustness of the supply chain are at levels above those in the past".