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Mon, Jul 23, 2007 - Page 10 News List

Nissan's UK plant balances currencies to handle risk


Britain's refusal to adopt the euro has become less troublesome for Japanese car giant Nissan compared with a few years ago, according to the group's European head, Trevor Mann.

With Nissan's biggest European plant based in Sunderland, northeast England, a sizeable part of the group's manufacturing costs is paid with the British pound -- a currency that is currently trading at 15-year highs against the yen and 26-year peaks against the US dollar.

A strong pound against the yen and the US dollar makes British goods more expensive and less competitive in Japan and the US.

But at the same time, Britain is the world's biggest single market for Sunderland-made Nissan cars.

"At the end of the day you really need to balance your currencies as much as possible so that you mitigate any of the risk," Mann said this month from his office above Sunderland's huge plant.

"And what is clear, we have income in pounds ... So it would make sense actually to have some cost in GB pounds, so you are sort of balancing that currency footprint and over the years that is what we have done," he said.

Britain's desire to keep the pound "was an issue for us a number of years ago and we looked at it quite pragmatically," Mann said.

Nissan's chief executive Carlos Ghosn has previously warned that jobs could be lost at the Sunderland operation because of Britain's exclusion from the euro.

Meanwhile Honda, which also has a large plant in England, frequently complains that Britain's reluctance to adopt the euro makes it harder to compete with rivals in the 13-nation eurozone.

Mann would not be drawn on the future of Nissan's Sunderland base, which opened 21 years ago and has been Britain's biggest car exporter for the past seven years.

Nissan began production at Sunderland in 1986.

By the start of this year, Nissan had built almost 4.5 million cars at Sunderland, a coastal city which is enjoying an economic recovery.

Nissan's Sunderland factory has been the biggest car plant in Britain for nine years. It's biggest market is North America, followed by Japan. They each sell around double the amount of cars sold by Nissan in Europe.

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