Fears of Nissan UK loss

The head of Nissan's British manufacturing arm, which this year celebrates its 10th anniversary of car production, said yesterday he did not believe the Sunderland plant would build a third model range.

Ian Gibson, the managing director, also disclosed that the UK part of the Nissan empire could make its first loss this year since the operation broke even in 1991.

The comments came as Nissan prepares to launch a replacement for the Primera saloon. The new car is already rolling off the production lines, and will be officially launched to British buyers at the Birmingham motor show in October.

Nissan has invested pounds 320m in the Primera, pounds 250m of which has largely been spent on investment in Sunderland. Since 1992 the company has also been considering whether to build a third model at the plant, alongside the Primera and Micra, which would eventually replace the recently launched Almera hatchback in the Ford Escort category.

Questioned about speculation of a possible third model line, Mr Gibson said: "Right now there isn't a hard proposition to evaluate." He said much of the total pounds 1.2bn investment at Sunderland was so recent that it had not had time to earn a return. Building a third model in the UK would also take business away from Nissan plants in Japan, where the Almera is currently assembled.

Mr Gibson said he was "not ruling out a loss" this year at the plant, which made net profits of pounds 10.4m in 1995. Nissan expects to build around 215,000 cars this year at Sunderland, the same number as last year and well below the peak production of 246,000 achieved in 1993.