The head of one of Europe's biggest car makers has attacked the European commission's decision to approve British government aid for the Nissan plant in Sunderland.
Jean-Martin Folz, the president of PSA Peugeot Citroën, described the decision as shocking and bizarre.
Speaking ahead of the opening of the group's new $600m (£405m) manufacturing complex at Porto Real in Brazil Mr Folz said: "I am surprised that a company which is making such brilliant results, from what we read in the press, needs such investment subsidy in a plant which is supposed to be one of the most productive in the UK."
Mr Folz said he could have understood the decision if Nissan had been deliberating between a European Union and a non-EU location for its investment in the production facilities for the new Micra but not when the choice was between two EU countries. "It is really bizarre, shocking."
Mr Folz is also unhappy that the EC is planning reform of the block exemption under which car distribution within the EU is exempt from some of the competition provisions of the Treaty of Rome.
The existing block exemption is due to expire next year and competition commissioner Mario Monti has said he wants to put the customer in the driving seat.
But Mr Folz said manufacturers and dealers had both said the current system was the right one and that "independent poll evidence" showed that consumers agreed.
"All the stakeholders have said they are very satisfied with the present situation. I hope the commission will listen to the opinion of concerned people and not to self proclaimed representative organisations," he said.
Peugeot's Ryton plant in the UK is currently working three shifts producing the popular 206 hatchback which will provide it with a secure future for the next few years. The key to PSA's commitment to UK manufacturing will come at the end of 2003. "At that time we have to make a strategic decision [over whether to invest £100m in a new paint shop]," Mr Folz said.
At the time the exchange rate between the pound and the euro and the relationship between sterling and the single currency "will be something we will be considering at that time".
Speaking at the official opening of the Porto Real plant - situated in the countryside between Rio de Janeiro and Sao Paulo - Mr Folz said that PSA was aiming for global sales of 3m vehicles this year. The new plant, which shares a site with suppliers that will provide 60% of its component requirements, is already producing the Citroën Picasso and production of the Peugeot 206 is due to start in a few months time.
The investment in Porto Real reflects PSA's determination to bolster its market share in Latin America's Mercosur's trade zone in general and Brazil in particular.
PSA is looking for sales in Brazil of 45,000 this year, which would give the group a 3.6% market share. "While these figures are still modest, our ambition is to become a major player by quickly increasing sales to more than 100,000."
Mazda will not reverse its decision to shift some production to Europe now that the euro is strengthening against the yen, Mark Fields, the firm's president, said yesterday.
The Ford Motor affiliate said in November it would start producing 100,000 sub-compact cars a year at a Ford plant in Europe from 2003 to reduce the impact of the strengthening yen on its export earnings.
Since then the euro has risen sharply but Fields said neither Mazda's profit forecast nor its plans to shift production had changed.
