Nissan cautious on Micra report

Micra production could move out of the UK

The Japanese car manufacturer Nissan has described as "speculation" a report that the European Commission is expected to approve an aid package to help its Sunderland plant win production of the Micra supermini.

The Financial Times says the commission is likely to approve a £40m government aid package for the plant, giving a much-needed boost to car-making in Britain.

Nissan, which produces the current version of the Micra at Sunderland, had been expected to shift production of the next generation Micra to France.

But the commission's approval of the aid payment should help Sunderland retain the operation, the newspaper said.

The aid approval is set to be rubber-stamped at the EU executive's weekly meeting on January 17 or 24, it added.

More than 1,000 jobs could be at risk

Nissan (UK) spokesman Andrew Horne said: "This is pure speculation.

"We are not expecting a decision about either the grant or whether the new Micra will be produced in Sunderland until some time in January."

There are fears that up to 1,300 jobs could be threatened if Nissan moves Micra production out of the UK.

According to some industry analysts, the new model could go to a Renault plant. The French company owns a third of Nissan.

Nissan Sunderland is Europe's most productive car plant and employs 5,000 people.

But about 80% of the cars produced there are exported to mainland Europe and sterling's strength cuts into the profit made on many of these sales.