SUNDERLAND, England (Thomson Financial) - 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 dollar.
A strong pound against the yen and the dollar in principle 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 told Agence France- Presse 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.'
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 the group's Japanese rival, Honda, which also has a large plant in England, frequently complains that Britain's reluctance to adopt the European single currency makes it harder to compete with rivals in the 13-nation euro zone.
Britain chose not to join the euro at its inception in 1999.
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.
'We'll be here really as long as we want to be here and are agile enough to change with the business circumstances,' he said.
Nissan began production at Sunderland in 1986, two years after signing an agreement with the government of Conservative prime minister Margaret Thatcher.
By the start of 2007, Nissan had built almost 4.5 mln cars at Sunderland, a coastal city which is enjoying an economic recovery after the collapse of Britain's shipping and mining industries towards the end of the last century.
Nissan's Sunderland factory has been the biggest car plant in Britain for nine years.
'Of course it is important for us to keep that size because we've built a factory around making that many vehicles and we've got that level of employment,' said Mann.
'It's not something to be so proud of... that is what we are. The things to be proud of are obviously your productivity levels but also your overall cost levels so you can maintain that size,' he added.
Mann, whose official title is senior vice president for manufacturing, purchasing and supply chain management for Europe, also stressed the economic benefit of Nissan's operations to Britain.
'It's good for the UK economy, it's good for the regional economy. It's good for our suppliers. We are one of the largest employers in the area, the biggest single-site employer.
'We're sustaining employment for around 15,000 people, directly and indirectly within the area and obviously that wealth is being recycled in the regional economy,' Mann said.
Sunderland's survival, when other British plants are either shutting or facing closure, owes much to it being relatively new -- enabling flexibility to quickly introduce new models and technology.
'We are not a single model plant so if one model is struggling in the market at a particular time we are able to balance that overall production with other models which have been successful,' Mann said.
Two of Sunderland's newest models -- the Micra C+C convertible and Qashqai hybrid (Dualis) -- are the first vehicles to leave Britain for Japan since 1996.
'The depreciation of the yen... makes it a very difficult business situation (to export to Japan) but clearly the Japanese customers love the (Micra C+C) vehicle and we'll fulfil their aspirations by shipping them over,' Mann said.
Nissan's biggest market is North America, followed by Japan. They each sell around double the amount of cars sold by Nissan in Europe.
Separately, data published by the Society of Motor Manufacturers and Traders showed the Japanese giant was the biggest producer of cars in Britain in May compared with the same month in 2006.
The data showed Nissan's Sunderland plant produced 29,996 cars in may, up 15.4 pct from a year earlier. By comparison Toyota Motor Corp's Burnaston plant in second place saw output fall 4.4 pct to 24,636 cars, while Bayerische Motoren Werke's Cowley plant raised output 11.6 pct to 19,000 units and Honda's Swindon facility produced 17,992 cars, up 15.1 pct from May 2006. tf.TFN-Europe_newsdesk@thomson.com afp/hjp COPYRIGHT Copyright AFX News Limited 2007. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.