CAR manufacturer Nissan has wiped out its debts after recording operating profits of £3.9bn for the past year.

The figures represent a remarkable recovery for the Japanese car manufacturer, which has moved from the edge of bankruptcy, wiping out debts of £2.36bn at the beginning of 2002, to be once again amongst the world's most efficient car manufacturer's.

Much of the transformation is due to the 44 per cent stake that French car maker Renault took in the business to help it stay afloat.

Carlos Ghosn, chief executive of Nissan, said: "Nissan's revival is a reality.

"Three years ago, our business was in accelerated decline. Today, we are not only back in the global race, we are among the pacesetters."

Nissan, which employs 4,500 staff at its Sunderland car plant, sold more than 2.77 million cars worldwide in 2002, an increase of 174,000 or 6.7 per cent on the previous year.

However, the full-year sales were 0.8 per cent below the company's forecasts made in May last year, mainly due to shortfalls in US and European sales.

The past year marked one of the biggest product year's in the company's history, with 12 new models being launched around the world.

Mr Ghosn said: "Our increased sales were made on the merits of our products themselves.

"They were not inflated by additional incentives. Our strategy continues to be based more on optimising profitability than maximising volumes."

The results represent the first part of Nissan's three year plan to establish sustainable, profitable growth, known as NISSAN 180.

The plan is for an additional one million sales worldwide and zero debt by the end of next year.

Looking to the rest of this year, Mr Ghosn, forecast that weaker global economic conditions, especially in Japan and the US, could affect the company's profitability.