Nissan will cease production of its luxury Infiniti brand at its Sunderland factory by July, putting 250 jobs at risk.

The Japanese carmaker said the move was part of plans to withdraw from the premium car market in western Europe, where the Infiniti brand faces stiff competition from local rivals including Jaguar Land Rover, Audi, BMW and Mercedes-Benz. The company did not mention Brexit.

Nissan employs about 250 workers on Infiniti production in Sunderland, out of a total of about 7,000. Redeployment is thought probable.

However, the plan is the latest blow to the workers at the Sunderland plant, the UK’s largest car factory, after Nissan announced plans last month to build its new X-Trail in Japan. The company had previously chosen Sunderland for the X-Trail after initially receiving pledges of more than £80m in government help. This offer was later reduced to £61m.

The Sunderland plant was the sole factory for Infiniti’s Q30 and QX30 models, both of which were sold in the UK and globally. Workers at Sunderland have manufactured more than 70,000 Infiniti vehicles since starting production in 2015, of which 12,000 were made in 2018. They were informed of plans to cease production on Tuesday.

Infiniti said it was “working to find alternative opportunities for any employees who would be affected, consulting with employee representatives where necessary and identifying opportunities for transition and training support where appropriate”.

Steve Bush, a national officer for the union Unite, which represents Sunderland workers, said the decision was driven by poor sales, and added he was confident that workers could be redeployed.

“In the coming weeks Unite will be working closely with Nissan to protect jobs and ensure that redeployment is carried out in an open and transparent way. We will also be seeking assurances on future employment levels and the production of other models at Sunderland,” he said.

The decision to withdraw Infiniti from western Europe means Sunderland will miss out on investment in production of the QX50 model.

Last month Nissan highlighted Brexit uncertainty when it revoked its choice of Sunderland for the new X-Trail, but Infiniti blamed Europe-wide market conditions for its decision. Tougher European vehicle emissions standards have made research and development more expensive, while the slump in demand for diesel cars has shaken the car industry.

Hong Kong-based Infiniti said its restructuring plan would “focus the brand on its largest growth markets, specifically North America and China, while withdrawing from western Europe”.

The company said it would place more focus on its sports utility vehicle lineup in North America and introduce five new vehicles to China over the next five years. Those markets will be served by factories in Japan, North America and Mexico.

Rebecca Long-Bailey, the shadow business secretary, said Nissan’s decision was another blow to Sunderland after the decision to shift production of the X-Trail.

“When we look at what is happening to the car industry, from Swindon right through to Sunderland, it is clear the UK car industry has been undermined by this government,” she said. “The Tories’ mishandling of Brexit has created prolonged uncertainty, and they have refused to support the industry while it faces enormous challenges, like electrification.”

She called on the government to “produce a strategy for the sector, working with trade unions, before it is too late”.

A spokesperson for the Department for Business, Innovation and Skills said: “This is a disappointing decision for the up to 250 dedicated workers at Sunderland who could be affected, but the company’s commitment to find alternative opportunities for those employees is welcome.

“Nissan has reiterated its commitment to the UK and its workforce by continuing to manufacture in Sunderland the current Qashqai, Leaf and Juke models, as well as the new Qashqai model.”

Infiniti said it would continue to offer servicing and maintenance to more than 60,000 customers in western Europe until early 2020 while honouring customer warranties.