Japan’s second largest automaker Nissan Motors Co. (NSANY) announced that it will invest ?125 million ($198 million) at its plant in Sunderland, northeast England in order to manufacture the new Invitation compact car. The move will create 2,000 jobs at Nissan and its suppliers in Britain. It will raise the workforce at the Sunderland plant by 600 people to 6,000 workers.

Nissan will start building Invitation compact vehicles from mid-2013 at the Sunderland with an annual capacity of 100,000 units. The Sunderland plant has a production capacity of 500,000 vehicles annually. Currently, Nissan manufactures Qashqai and Juke models at the plant.

Britain has been struggling hard to save automotive jobs as the European companies are planning for capacity reductions on the back of the ongoing economic crisis. As a result, the investment at the Sunderland plant will be supported by a ?9.3 million ($15 million) loan from Britain in order to encourage global automakers for making more investment in Britain.

Recently, Britain’s business secretary, Vince Cable had a discussion with executives from General Motors Co. (GM) to urge them to halt the planned closure of a plant in northern England, which employs about 2,800 people.

Nissan posted a 3.2% rise in profits to ?82.7 billion ($1.07 billion) in the third quarter of its fiscal year ended December 31, 2011 from ?80.1 billion in the same period last year despite the backlash from severe floods in Thailand and an appreciating yen.

Sales in the quarter went up 10.9% to ?2.33 trillion ($30.27 billion) from the prior year. Operating profit scaled up 3.6% to ?118.1 billion ($1.54 billion).

Nissan expects to record a profit of ?290 billion ($3.77 billion) for the fiscal year ending March 31, 2012. It also anticipates reporting an operating profit of ?510 billion for the year.

Nissan recovered faster from both the earthquake on March 11 last year and flooding in Thailand that disrupted parts supply chains compared with Toyota Motor Corp. (TM) and Honda Motor Co. (HMC).

Due to better than expected recovery and promising results, the company currently retains a Zacks #2 Rank on its stock, which translates to a short-term (1 to 3 months) rating of Buy.

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