KEY POINTS:
One of Europe's top executives called yesterday for political action to tackle the damage being done to the car industry by the overvalued euro.
Carl-Peter Forster, president of General Motors Europe, said the disadvantage European car manufacturers were suffering because of the high value of the euro against Far East currencies such as the yen and the Korean won had been underestimated by governments within the eurozone.
He estimated that the currency difference gave Japanese car makers such as Toyota, Nissan and Honda a 3000 to 4000 advantage over their European rivals on each model sold.
"It is not understood how big a contribution this makes to our lack of competitiveness," said Mr Forster.
"We have to fight that and it is something our politicians should really deal with.
It is not something you can leave to the free market."GM's European operations returned to the black last year for the first time since 1999, making an operating profit of US$227 million ($317 million).
In the previous six years, GM lost US$3bn, resulting in a restructuring programme which cost 13,000 jobs.
But Mr Forster warned that more cuts, possibly including plant closures, may be necessary to maintain GM's recovery.
GM's Vauxhall car plant at Ellesmere Port on Merseyside is pinning its survival hopes on being selected as one of the locations for production of the new Astra model.
Jonathan Browning, the chairman of Vauxhall and GM Europe's vice president of sales and marketing, said it was possible that a decision would be taken in the second quarter about where the new Astra will be built, although it could slip to later in the year.
He added that GM had no plans to scrap the Vauxhall brand in the UK.
Mr Forster declined to give a guarantee for any of the European plants which currently produce the Astra but said a closure of one of them was an "extreme solution".
The Merseyside plant accounts for about one-fifth of Astra production in Europe but its output went down last year after the third shift at the plant was axed.
Mr Forster said part of the group's future strategy would be to build several different models from its various brands on a single production line.
Opel's Russelsheim plant in Germany will start building the Saab 9-5 next year and there is also a possibility of Chevrolets being built in Western Europe.
Mr Forster criticised the "arbitrary" target set by the European Commission of cutting carbon emissions from cars to 120 grams per kilometre by 2012 - 26 per cent below the level achieved in 2005.
But he stressed GM's commitment to producing more environmentally friendly vehicles using hybrid, fuel-cell and bio-fuel technology and called for more European governments to follow the example of Sweden, where big tax breaks are available on the purchase of ethanol-powered cars.
- INDEPENDENT
