A senior Nissan executive has warned that the UK is "not a competitive place to be building cars" due to high energy costs and other factors.
Alan Johnson, senior vice president for manufacturing at Nissan, delivered the stark assessment during testimony to MPs on Tuesday.
He highlighted that the Sunderland factory "pays more for its electricity than any other Nissan plant in the world".
The warning comes just weeks after the manufacturer reduced operations at its Wearside plant, which could be a further blow to the UK automotive sector.
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A Nissan boss has said the UK is not a suitable place for manufacturing
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Johnson told the House of Commons' Business and Trade Committee that manufacturing vehicles in high volume in the UK is not competitive.
He explained: "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. We are in a competition, you have to compete."
In February, a late shift on one of the factory's production lines was closed as part of efficiency measures.
However, no jobs were lost at the Sunderland plant, which employs around 6,000 people. The approximately 400 affected workers were switched to other production lines to "maximise efficiency".
Former Prime Minister Rishi Sunak and ex-Chancellor Jeremy Hunt visited Nissan's Sunderland plant in 2023
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This adjustment came after Nissan announced last year it would be cutting about 9,000 jobs worldwide as financial results for the first half of 2024 revealed its operating profit had plummeted by £1.59billion.
During Tuesday's hearing, Johnson called for greater Government support for the UK's automotive sector and more incentives to boost the production and sale of electric vehicles.
He added: "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. We need the market to be there."
The Nissan executive confirmed that new electric Leaf and Juke models are planned for production in Sunderland following a massive £2billion investment in 2023.
Johnson welcomed the recent relaxation of regulations included in the Zero Emission Vehicles (ZEV) mandate announced by Sir Keir Starmer earlier this month.
Nissan had previously warned that the mandate requiring 80 per cent of new cars sold to be zero-emission by 2030 risked undermining UK manufacturing.
Labour has now confirmed it will give car manufacturers more flexibility and allow hybrids to be sold for longer.
The executive also reassured MPs that Donald Trump's 25 per cent tariffs on foreign car exports had only a "small" impact on the Sunderland plant, but noted that Nissan as a whole was "impacted significantly".
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A North East Combined Authority meeting last week revealed that road vehicles and components account for 30 per cent of the North East's exports globally.
However, less than six per cent of these exports go to the USA, leaving the region "less exposed" than other areas.
