FILE PHOTO: Logo of the Nissan Motor Co. is displayed at the 44th Tokyo Motor Show in Tokyo, Japan, November 2, 2015. REUTERS/Issei Kato/File Photo

LONDON (Reuters) - Nissan 7201.T will cut hundreds of jobs at its Sunderland plant, Britain's biggest automotive factory, as it tackles declining demand for diesel models across Europe, a source told Reuters on Friday.

Nissan builds its Qashqai and Juke models at the northeastern English site and the company’s sales in Britain, Europe’s second-largest car market, have fallen 35 percent so far this year, worse than overall demand in the sector, which is down 12 percent.

Jaguar Land Rover TAMO.NS is cutting around 1,000 jobs and output at two of its factories after a fall in sales which the industry has partly blamed on confusion over government diesel policy, with a tax hike having come into force this month.

Nissan said it is discussing the operational changes with its employees.

“We will be managing a planned short-term reduction in powertrain supply and plant volumes,” the firm said in a statement.

Demand for diesel fell by a third in the first three months of this year in Britain hit by continued consumer concern over planned tax rises and proposed bans and restrictions in several cities around the world.

Nissan, which in 2016 announced that it would build new models in Britain, providing a boost to Prime Minister Theresa May, said on Friday its production changes were not linked to Britain’s departure from the European Union.

“This is not related to Brexit. In time we expect volumes to increase as we prepare to launch the next generation Juke, Qashqai and X-Trail.”