Nissan will build its next Infiniti models outside Japan for the first time to mitigate the effects of a strong yen, chief executive Carlos Ghosn said at the Frankfurt show.

The strength of the yen, which at 77 to the dollar is close to a record high, makes Infiniti cars built in Japan less price competitive with rival luxury brands. Speaking at a joint press conference with Dieter Zetsche, chief executive of Daimler, about product development efforts between the two carmakers, Ghosn said: “The next generation Infiniti cars will be built outside Japan."

Toyota makes one Lexus model outside in Japan - some RX SUV models are built in Canada.

Japanese carmakers are concerned that the yen has strengthened beyond what domestic exporters could cope with. Honda said last month it was studying possible production bases overseas.

One way of cutting the cost of making cars in Japan is to take advantage of the strong currency to import more components. Toyota has said, however, there are limits to importing parts, given the time and money required for packaging and transport.

Nissan did not say where it would build the Infiniti but indicated Europe and China were possibilities and there could be more than one manufacturing site. Nissan and Daimler will likely cooperate on developing an Infiniti model with Mercedes architecture, Ghosn and Zetsche said.

So far, Renault and Daimler are exploring electric versions of the Mercedes Smart car and the Renault Twingo, as well as a small delivery van based on Renault architecture.

Zetsche said the companies' cooperative efforts were based on practical projects, and so differed from the disastrous Daimler-Chrysler alliance of the last decade.