THE dice are loaded against the region's manufacturers because of the unfavourable sterling/euro exchange rate.

That was the message from Nissan UK managing director John Cushnaghan when he addressed the fifth International Automotive Conference in Sunderland yesterday.

He said: "Our exports are uncompetitive when realistically priced in foreign currency. Our margins are suffering to the point where exporters are losing money on everything they sell in Europe.

"The really frightening thing is that when we meet here again in two years time nothing will have changed."

"Will we be in the euro in 2004, and what will the exchange rate be? I don't know and no one knows, and that's the real problem."

Mr Cushnaghan also revealed how close the Nissan plant in Sunderland came to losing out to its French partner's Renault factory to build the Micra replacement, which share's the same platform as the Renault Clio's replacement.

He said: "The French plant had the capacity, and economically the balance was tipped in favour of France, largely because of exchange rates.

"Only the promise of British Government money tipped the scales back Sunderland's way. We were very close to losing out, and we will have to go through the same process for new models in the future."

Two years ago, Mr Cushnaghan predicted that staying out of the euro-zone would hit British industry hard.

He said: "Since then, we have lost car production at Ford in Dagenham and Vauxhall in Luton."