Nissan's Chief Operating Officer Ashwani Gupta [Source: BBC]

A senior boss at Nissan has warned the “economics have to work” for the company to make new electric models of its Juke and Qashqai cars in the UK.

Ashwani Gupta, chief operating officer at the firm, told the BBC the UK faced a challenge to remain competitive with other car-making countries.

He said manufacturing costs in the UK were higher than others due to higher energy bills and overall inflation.

Nissan employs more than 6,000 people at its Sunderland manufacturing plant.

Mr Gupta warned having lower production costs was key to keeping the UK competitive. He added other tools to keep the UK attractive to car-makers were ongoing government support in the transition to electric vehicles, as well as robust supply chains.

Nissan has already committed to producing the successor to its Leaf electric car at its factory in Sunderland, but Mr Gupta said that when it came to allocating production of new Juke and Qashqai models between its 44 global plants, the company “needed to have the economics to justify it”.

The decision of where to build the new Juke and Qashqai does not have to made for a couple of years yet as the next models of those big Sunderland-made sellers are not due until 2027-28, and decisions are usually made two or three years in advance.

Car makers often press governments to provide more support. Nissan recently secured about £100m in public money towards a £1bn investment in expanding a Chinese-owned battery plant located right next to its Sunderland plant.

But the map of global car manufacturing is being reshaped and the US is offering tens of billions in subsidies to car makers who move production and supply chains there. The EU is also expected to respond with carrots of its own.

The comments from Mr Gupta come as Nissan and Renault unveiled the details of a major shake-up of their often strained 24-year-old alliance, after months of negotiations between the motor industry giants.

In a joint statement, the two firms said they had “rebalanced” their relationship by agreeing that Renault would cut its stake in Nissan.

Under the deal, Nissan will take a stake in Renault’s flagship electric car unit Ampere.

The companies also said that they will work together on electronics and battery technology, as well as making savings from joint projects in Europe, India and Latin America.

The agreement will see Renault cutting its stake in Japan’s Nissan from more than 43% to 15%, the same size as Nissan’s stake in its French counterpart.

The companies also said that Nissan will take a stake of up to 15% in Renault’s new electric vehicle venture, Ampere.