Nissan will increase production at its Sunderland plant by a fifth and double the amount of parts it sources from within the UK in an attempt to offset higher costs following Britain’s withdrawal from the EU.

The Japanese car giant will step up production by 20pc to around 600,000 vehicles per year, the Nikkei Asian Review reported.

There will also be an increase in the number of electric vehicles the company produces as it anticipates growing demand in the UK and Europe.

The investment in the Sunderland plant could be worth up to £14m, it was reported.

Nissan plans to source around 80pc of the parts for the plant in the UK, up from 40pc, as it looks to insure itself against the risk of higher export and import duties after Brexit.

The Sunderland plant, which is one of the largest in the UK, was responsible for 507,000 of the 1.73m cars that rolled off UK production lines last year.