NISSAN yesterday said its Sunderland plant had been given another boost through the car scrappage scheme by revealing significant increases in the production of two of its key models.

The Japanese car maker said the UK scrappage scheme had seen production of the Micra lifted by 40 per cent last month, with 11,000 models being made, and demand for its Qashqai saw production raised by 15 per cent. Forward orders are also way ahead of expectations.

The figures come amid findings from the Society of Motor Manufacturers and Traders (SMMT) that UK vehicle production last month hit its slowest rate of decline since the crisis began.

And it is the latest boost to the Sunderland plant from the scrappage scheme, which offers a £2,000 Government- backed trade-in for cars at least ten years old, with similar initiatives around Europe, accounting for orders for 24,000 cars between June and last month.

The demand has seen Nissan reemploy 350 of the temporary staff made redundant as part of the 1,200 job cuts in January, who will be employed at the North-East plant until the end of the year, at least.

However, despite the positive effect of the scrappage scheme for the Sunderland plant, Trevor Mann, senior vice president for manufacturing in Europe, warned the outlook remained uncertain, adding: “The boost has been very welcome but we need to remain cautious as scrappage incentives are scheduled to come to an end shortly. We will continue to monitor the market and adjust our production plan accordingly.”

The scrappage initiative’s effects have come as a further boost to the plant, which has seen a significant turnaround since last year’s redundancies and early Christmas shutdown.

Earlier in the year, the plant was named as the destination for Nissan’s European Centre of Excellence for Battery Manufacturing for its electric vehicles, prompting speculation Sunderland may be chosen to make the company’s Leaf model.

Business Secretary Lord Mandelson told The Northern Echo it is not a done deal for Sunderland to make Nissan’s electric cars – which could create thousands of jobs at the company and in its supply chain – but it is heading in that direction.

Traditional engine production was also secured earlier in the year after it was announced the site will make a two-litre petrol engine, codenamed MR, from next year. The move will safeguard up to 130 jobs when production begins, and could create 200 more by 2013.