Nissan attains record car output in North-east

The Japanese car maker Nissan is set to build a record number of cars at its Sunderland plant this year but the strength of sterling is likely to have hit the profitability of the UK operation hard.

Output of the Primera and Micra models from Sunderland will reach 271,500 this year - a 17 per cent increase on the 231,000 cars produced last year - and the highest level of production since 1993.

But because three-quarters of Sunderland's output is exported - mainly to the Continent - profits will have taken a dip from the pounds 28m recorded in 1996 because of exchange rate factors. Production next year is expected to remain at current levels but it will begin to rise again in 1999 when a third model goes into production at Sunderland.

Nissan is investing an additional pounds 215m on the plant to begin production of a C-class medium-sized model to replace the Almeira. Output will eventually reach 100,000 a year, increasing production from the site to 370,000.

Ian Gibson, chief executive of Nissan Motor Manufacturing UK, said the impact of the strong pound had been partly mitigated by productivity improvements and the high capacity utilisation at Sunderland. Output per employee has risen 10 per cent this year while the production line is working at more than 90 per cent capacity.

Mr Gibson questioned Toyota's decision to build a third model in France rather than expand its Burnaston site near Derby. The rival car manufacturer is investing pounds 400m on a factory in Valenciennes to build a small car to replace the Starlet.

The strategy is to increase sales in France, where Toyota has only 1 per cent of the market, by having a high-profile manufacturing plant in the country. But Mr Gibson said Ford had attempted the same strategy in the 1980s, building an automatic transmission plant in France to improve their French credentials and local sales but it had not made any difference.