(Bloomberg) — Britain’s auto industry won investment pledges of 2 billion pounds ($3.1 billion) as Nissan Motor Co. and McLaren Automotive Ltd. announced plans for new cars and the government backed loans for Ford Motor Co. engines.
Nissan will spend 420 million pounds expanding its plant in Sunderland, England, to begin making the Leaf electric-powered vehicle in 2013, the company said today in a statement. The U.K. government, which is also backing the Nissan car, said it will guarantee loans to support Ford’s five-year, 1.5 billion-pound project to develop cleaner-burning engines. McLaren said it plans production line for the new MP4-12C supercar.
“What we’re seeing is transformative technology as we bring about a transition” to low-carbon-emission vehicles, U.K. Business Secretary Peter Mandelson said today in a Bloomberg Television interview. “I think it’s right to secure this in the actions that we’ve taken.”
Industrywide car sales in the U.K. rose 29 percent from a year earlier in the two months through February, helped by the extension of a government “cash-for-clunkers” incentive until the end of March. The guarantees to Ford, along with support offered to General Motors Co. on March 12, are among the first issued under the U.K.’s year-old Automotive Assistance Program aimed at backing manufacturing rather than sales.
Ford received a 360 million-pound guarantee from the U.K. to cover part of a 450 million-pound loan from the European Investment Bank for the development of low-emission car engines. The Dearborn, Michigan-based carmaker said it will do research on and manufacture the gasoline and diesel engines at four locations in the U.K.
Cars, Batteries
Nissan, Japan’s third-largest carmaker, will receive a 20.7 million-pound U.K. grant to invest in production lines at Sunderland for the Leaf and car batteries. The plant will build 50,000 Leafs and 60,000 lithium-ion batteries a year, the Yokohama-based manufacturer said today. The model will also be built in Japan and in Smyrna, Tennessee.
The government support to Ford and Nissan will secure “tens of thousands” of jobs in Britain, Mandelson said. Ford estimated that its U.K. operations alone employ 100,000 people directly or indirectly.
McLaren Automotive, owner of the second most-successful Formula One racing team after Ferrari, started building the MP4- 12C’s plant on March 1 at its headquarters in Woking, England. The first sports cars will roll off the production line in the first half of 2011 and that the 40 million-pound project will create as many as 300 jobs, McLaren said today.
“It’s not just about the MP4-12C, it’s about developing a whole new car company that will deliver technically advanced products,” Chairman Ron Dennis told reporters today at the site. “It’s good news for McLaren and I believe it’s good news for U.K. Plc.”
Funding for the MP4-12C has come from existing shareholders and a new share offering will support development of more car models, the company said in a statement.
–With assistance from Steve Rothwell in Woking, England, and Elliot Gotkine in Sunderland, England. Editors: Tom Lavell.
To contact the reporters on this story: Thomas Penny in London at tpenny@bloomberg.net; Robert Hutton in London at rhutton1@bloomberg.net.
To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net.

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