Japanese car maker Nissan has threatened to hold back from new investment in the UK because of the strong pound.

The President of Nissan Europe, Norio Matsumura, hinted the British economy was making international firms think twice before pumping money into British business.

In an interview with the Economist Intelligence Unit's Motor Business Europe, he said: "If the current strength of sterling continued then clearly we would have to think about investment elsewhere in the future.

"If sterling weakened by 10-20% then we might again reconsider investment in the UK.

"We are hoping that if the UK announces its intention to join EMU this will weaken sterling."

Dealing in Euros

Mr Matsumura said Nissan planned to deal in the new single European currency, the euro, from its launch on January 1, 1999, and added the company was encouraging as many of its suppliers as it could to follow suit.

He said the company was still considering whether to move into euros for the UK.

The company is currently looking for suppliers for the production of its new Sunderland-built Almera car, which Mr Matsumura said would be safe in terms of investment.

Multi-national problems

Nissan Europe's parent company has problems in Japan too.

Reports from Tokyo suggest it may be considering selling its headquarters building in the city, to improve its financial condition.

Nissan has been hit by sales declines as Japan's economy slumps.
 

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