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Nissan prepares to remove 'frustration' over currency

Nissan, whose Sunderland plant is gearing up for full production of Primera from December 17, is determined to solve the problems caused by the UK being outside the eurozone.

John Cushnaghan, Nissan Motor Manufacturing UK managing director, said the plant had been the most efficient in Europe for five years. But that efficiency was lost in the turmoil of currency exchange, he said.

With alliance partner Renault, Nissan was trying to eliminate currency as an issue, whether the UK joined the euro or not "because we are so frustrated by it," said Mr Cushnaghan.

To do that meant matching purchasing with sales. With 70% of cars sold by Nissan built in Sunderland, there would be a gradual but definite shift to buying more components within the eurozone - and away from the UK.

The Sunderland plant has 226 suppliers of which 132 are UK-based.

The establishment of Renault Nissan Purchasing (RNP) as a separate company will accelerate the change. At the moment RNP is responsible for about a quarter of total spending. "We will stop being responsible for purchasing here as that figure increases," said Mr Cushnaghan.

Already all paint is bought centrally "which gives us a huge price advantage," he said. It also means Nissan is starting to use some of Renault's more adventurous colours helping the company live up to the dictat of Nissan president Carlos Ghosn that "Nissans will never be boring again".

Bulk buying of steel is another area where Mr Cushnaghan expects to see big savings. Now Sunderland's mid-term future is secure, Mr Cushnaghan and his team are planning to take production to 500,000 cars a year when new Micra arrives at the end of next year.

All round the plant - including the managing director's office - are signs that say 'NRP 555'. This stands for Nissan Revival Plan, 5,000 jobs, 500,000 vehicles and 5,000 production hours a year.

Currently, two shifts give about 3,700 production hours and produce 350,000 cars. Adding a third shift takes the total to 5,000 hours.

Total investment for new Primera has been £230m, almost a third of which has been spent in the bodyshop, introducing a flexible manufacturing system. The other major expenditure was in the press shop where 217 new dies have been introduced for new Primera.

This investment has given Sunderland the capability to build 500,000 cars a year, said Mr Cushnaghan. It will also allow more rapid styling changes to be introduced to help Nissan keep its models looking fresher.

The alliance partners have ruled out, in the short term, any cross-badging of vehicles but this will not apply to light commercials. The Renault Trafic will be built by Nissan in Barcelona and also badged Nissan.

"We discussed cross-badging for the next Micra and Clio but ruled it out," said Mr Cushnaghan.

It is an issue that will be discussed again. "The co-development of the C-segment Megane/Almera replacement will allow us to look at badging again," he said.

As Sunderland builds towards its 500,000 potential capacity, the flexibility of its two production lines will be fully tested.

At the moment, one line builds Primera and Micra, and line two produces the Almera.

Next year, new Micra will be built on its own line to give greater volumes and Almera and Primera on the other line. "Eventually we will build Micra and Almera on one line and Primera and Almera on the other - this means that Almera will become the buffer so we can increase Micra and Primera production according to demand," said Mr Cushnaghan.

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