NISSAN’s UK factory in Sunderland is to lose the production of its high-volume small car, the Micra, when the replacement model is launched in 2010.

An announcement on the future of the plant is expected next month.

Nissan has the largest of the Japanese-owned car plants in Britain, accounting for about one-fifth of the UK’s total car production and employing some 4,200 in the northeast.

The likely effect on the plant’s workforce of the loss of the Micra is not yet clear, but large job losses are not expected. Nissan plans to take up the slack by boosting production of its successful Qashqai, a mid-sized “cross-over” (a vehicle derived from a car but sporting features from an SUV) and related models.

The loss of the Micra is the latest twist in the plant’s history. Nissan Motor Manufacturing (UK) was established in 1984 as the first of the Japanese carmakers’ “transplants”, supplying cars for European markets. Sunderland has been acclaimed as one of Europe’s most efficient car plants, but in recent years Nissan has expressed concern about the unfavourable pound-euro relationship.

When the current Micra model was introduced in 2003, Nissan chief executive Carlos Ghosn gained UK government support for Sunderland after threatening to transfer production elsewhere.

Last week Ghosn said: “There will be changes at Sunderland. The plant is efficient and, with the pound declining, becoming more cost-competitive. The Micra is competing against cars made in low-cost countries. It is not profitable in Europe, but the Qashqai is.”

On Tuesday, at Nissan’s headquarters in Tokyo, Carlos Ghosn will present the next five-year plan for the carmaker that is vying to be Japan’s second largest. Ghosn will say he has looked into the future – and it is electric.

In a business under growing environmental pressure and beset by the ever-rising cost of oil, Nissan regards its commitment to the commercialisation of electric cars as the most important development in the industry.

It sees potential for boosting sales of conventional cars in Russia, China, India and South America, but regards the car markets in Europe and Japan as essentially static and predicts further weakening of sales in North America. Hence the emphasis on electric.

Ghosn is the man who brought Nissan back from the brink. The company was close to collapse when Renault, majority owned by the French government, came to the rescue in 1999 and formed an alliance with it. Ghosn, a vice-president of Renault, got the job of turning Nissan round.

Nobody gave him much chance of success, but Ghosn’s revival plan, followed by his Nissan 180 plan (1m more vehicles a year, 8% operating profit, zero debt), restored the company to robust health and made him a hero in Japan. When Renault president Louis Schweitzer – the architect of the Nissan alliance – retired in 2005, Ghosn was made chief executive of both Renault and Nissan.

Nissan has not done so well since then, although it is still one of the more profitable of the world’s carmakers. The last three-year plan set a target for annual sales of 4.2m vehicles by 2007: in reality they were 3.6m. Ghosn’s high ambitions for Renault are also proving hard to achieve.

Speaking at an international product review in Portugal, Ghosn was confident Nissan’s future progress would come from innovation: “The period of revival and retooling of the past eight years is over. We’ve made massive investment, renewed everything: it’s done. Nissan lost its way with technology in the 1990s and became disconnected from what the consumer wanted. Now we have reconnected.”

Nissan is sharing its electric-car expertise with its partner Renault and using the French brand. Ghosn has made an exclusive deal to supply cars to Israel as part of a state-backed venture that includes creating a network of roadside stations where cars can recharge their batteries.

Israel’s plan to be the first nation to encourage large-scale use of electric cars was developed after Ghosn met President Shimon Peres at last year’s Davos economic summit and heard of the infrastructure proposals of Shai Agassi, a Silicon Valley entrepreneur, who runs an initiative called Project Better Place.

Having no oil and being a small country where typical car journeys are short, Israel is regarded as an ideal testing ground for electric cars. The infrastructure will be in place by 2011 and, to encourage consumers to use electric cars, the government has set the purchase tax on them at 10%, rather than the regular 72%.

Ghosn sees Israel as the model for similar deals in other countries and Renault-Nissan and Project Better Place have since announced an initiative in Denmark, which will provide tax breaks for zero-emission vehicles from 2011. There has even been a serious enquiry from one of the oil-rich Gulf states.

Elsewhere, Ghosn expects the first plug-in Nissans will be sold to firms and fleets in 2010 and be available in the mass market by 2012. Nissan and Renault will offer a range of electric vehicles at prices equivalent to today’s petrol or diesel-engined models. The lithium-ion batteries that will give the cars a range of up to 120 miles will not be included, but leased separately.

Ghosn anticipates that there could be arrangements like mobile-phone contracts where the batteries are provided free if the car owner signs up for a certain time or frequency of use of the charging stations.

The plan is that the battery plus the cost of charging has to be less than using petrol or diesel. So the more the price of oil rises, the better the prospects for the electric car.

General Motors is racing with other suppliers to have suitable lithium-ion batteries for a production version of its E-Flex plug-in hybrid system by 2010. Ghosn does not entirely reject the GM idea of a small combustion engine to charge the batteries on board and extend the car’s range but says that thus equipped, it is not a zero-emission vehicle – and that, for Nissan, is the whole point of the electric car.

The company is proud of its apparent leadership in electric cars and is not proposing to share this technology outside its alliance with Renault. This is in marked contrast to its conventional cars, for which it is expanding links with other manufacturers. Nissan already buys its Japanese market micro K-cars from Suzuki and plans to replace its Micra model with a Suzuki version made in India. In return, Nissan will provide Suzuki with a compact “people carrier”.

Nissan recently announced two agreements with Chrysler in America. The first was to provide a version of its Versa saloon from its plant in Mexico for Chrysler to sell in South America. The second was wider-ranging: a small car from its Oppama factory in Japan to be restyled and renamed as a Chrysler or Dodge for America. The trade-off will be for Nissan to stop making its Titan pickup truck in the US and replace it with a version of the Dodge Ram.

While its new factories in low-cost countries like China and India are mostly to make cars for local markets, Nissan aims to export cars from the plant in Tangier, Morocco, a joint venture with Renault that will open in 2010.

Nissan’s British plant at Sunderland is due to lose production of the Micra when a new model is introduced in 2010, but Ghosn promises that expansion of production of the Qashqai, a family hatchback, and other products will fill the gap. “It’s not in our interest to run Sunderland, or any other plant, below full capacity,” he said. “Micra isn’t profitable in Europe, Qashqai is.”

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