Nissan has taken a significant step towards strengthening its manufacturing capabilities in the UK by entering into a non-binding agreement with Chinese carmaker Chery. This collaboration is set to commence vehicle assembly at the Sunderland plant, with manufacturing expected to begin in the 2027 financial year. The partnership aims to bolster job security at the UK’s largest car factory while marking the first instance of mass-market Chinese vehicle production on British soil.
A Strategic Collaboration
On Wednesday, Nissan announced its intention to explore contract manufacturing for Chery, which is partially state-owned. This partnership could represent a pivotal moment for both companies, as Chery has recently made strides in the UK market with its brands, including Chery, Omoda, and Jaecoo. Notably, the Jaecoo 7, a plug-in hybrid electric vehicle produced in China, topped sales in the UK in March, underscoring the growing presence of Chinese automotive brands in Britain.
Massimiliano Messina, Nissan’s regional chair, expressed optimism regarding the collaboration, stating, “This is an important step forward for our operations. We are looking forward to working with Chery International UK in the coming months to finalise a position that is optimal for both companies.”
Job Security for Sunderland’s Workforce
The Nissan Sunderland facility, renowned for its efficiency, produces popular models such as the Qashqai SUV, Juke crossover SUV, and the electric Leaf. However, the factory has faced challenges due to upheavals within Nissan’s Japanese headquarters and a sluggish recovery in European car sales post-pandemic.
The potential agreement with Chery is expected to provide job security for approximately 6,000 employees at the Sunderland plant. Recent operational changes at the site included consolidating production lines without resulting in job losses, thereby paving the way for this new partnership. In 2025, Sunderland managed to produce 273,000 vehicles, reflecting a 3% decline from the previous year and highlighting the need for renewed activity at the plant.
Steve Bush, national officer at Unite, the union representing Nissan workers, remarked, “This is very good news for Nissan’s Sunderland workers and the UK’s automotive industry in general at a time of uncertainty for the sector. Chinese vehicles are increasingly visible on British roads, so it makes sense for UK workers to build them here as well.”
The Rise of Chinese Manufacturers
Nissan’s engagement with Chery aligns with a broader trend of European carmakers collaborating with Chinese manufacturers. The entry of Chinese firms into the European automotive landscape has intensified competition, particularly in the electrified vehicle segment. Chinese manufacturers benefit from substantial state subsidies and reduced labour costs, positioning them as formidable rivals to traditional European brands.
David Bailey, a professor of business economics at the University of Birmingham, described the potential deal as “historic.” He noted, “Twenty years ago, Chinese brands were trying to break into Europe. Now they’re going to build cars in Britain’s biggest car factory. China isn’t just competing with western carmakers anymore; it’s becoming part of the industrial base.”
Wider Implications for the Automotive Sector
The agreement between Nissan and Chery follows a series of strategic partnerships between European and Chinese manufacturers. For instance, Stellantis, which encompasses brands such as Peugeot and Fiat, recently announced plans to produce vehicles for China’s Leapmotor in Spain. Additionally, Ford is reportedly in negotiations to sell part of its Valencia plant to Geely, while Volkswagen has also expressed interest in collaborating with Chinese firms.
Chery is aiming to become one of the top three automotive manufacturers by sales in the UK and has established a research and development headquarters for commercial vehicles in Liverpool, indicating its commitment to the British market.
As discussions continue, it remains unclear whether Nissan will produce hybrid or electric vehicles for Chery at the Sunderland plant.
Why it Matters
This partnership represents a crucial development for the UK automotive industry, which has faced significant challenges in recent years. The collaboration not only promises to secure thousands of jobs but also signifies a shift in the global automotive landscape, where traditional boundaries are blurring. The entry of Chinese manufacturers into the British market through local production could reshape the competitive dynamics of the sector, ensuring that the UK remains a vital player in the evolving global automotive ecosystem.
