In a significant development for the UK automotive industry, Nissan has entered into preliminary discussions with Chinese manufacturer Chery to assemble vehicles at its Sunderland plant. This non-binding agreement, if finalised, could commence mass production by 2027, bolstering job security at the UK’s largest car manufacturing facility amid ongoing challenges within the sector.
A Strategic Move for Nissan
On Wednesday, Nissan announced its intention to explore a contract manufacturing arrangement with Chery, a company partly owned by the Chinese government. This partnership represents a pivotal shift, potentially marking the first instance of mass-market Chinese vehicles being produced in Britain. The discussions follow the recent surge of Chery’s models, such as the Jaecoo 7, which achieved the status of top-selling vehicle in the UK in March, demonstrating the growing presence of Chinese brands in the British market.
Massimiliano Messina, Nissan’s Chair for various regions including Europe, expressed optimism about 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.”
Impact on Job Security and Production Capacity
The Sunderland facility, renowned for its efficiency, currently produces models such as the Qashqai SUV, Juke crossover, and the electric Leaf. Yet, the plant has faced operational challenges due to a global restructuring at Nissan and a slow recovery in European car sales post-pandemic. In light of these changes, the factory’s output fell to 273,000 vehicles in 2025, significantly below its capacity of 600,000.
With the potential Chery deal, approximately 6,000 jobs at Sunderland could be safeguarded. The recent consolidation of operations at the plant, involving the streamlining of production lines without layoffs, has opened the door for this new partnership. Steve Bush, a national officer at Unite, the union representing Nissan employees, heralded the news as “very good for Nissan’s Sunderland workers and the UK’s automotive industry in general at a time of uncertainty for the sector.”
The Broader Context of Chinese Investment
The burgeoning collaboration between Nissan and Chery reflects a broader trend of Chinese manufacturers becoming increasingly influential in the global automotive landscape. Traditional European carmakers are facing mounting pressure from their Chinese counterparts, who benefit from substantial state subsidies and lower production costs. This shift has prompted several European manufacturers to seek partnerships with Chinese firms rather than attempting to defend their market share alone.
David Bailey, a Professor of Business Economics at the University of Birmingham, characterised the potential agreement as “historic.” He remarked, “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.”
Other European automotive giants have also begun to collaborate with Chinese manufacturers. For instance, Stellantis recently announced plans to produce vehicles for China’s Leapmotor in Spain, while Ford is reportedly selling part of its Valencia plant to Geely. Volkswagen has also indicated a willingness to partner with Chinese companies, highlighting a significant shift in the industry’s dynamics.
Chery’s Ambitious Goals in the UK Market
Chery’s aspirations in the UK market are evident, as the company aims to position itself among the top three manufacturers by sales. The establishment of a research and development headquarters for commercial vehicles in Liverpool further underscores its commitment to expanding its footprint in the UK.
While the specifics of the vehicles Nissan will manufacture for Chery remain unclear—whether they will be hybrids, electric models, or a combination of both—the implications of this partnership are significant. The British government had previously floated the idea of Jaguar Land Rover producing cars for Chery, but this has not gained serious momentum.
Why it Matters
The potential collaboration between Nissan and Chery not only holds promise for job security and production revitalisation at the Sunderland plant but also represents a landmark shift in the UK automotive landscape. As Chinese manufacturers establish themselves within Britain’s industrial base, this partnership could herald a new era of collaboration and competition, reshaping the future of car manufacturing in the UK and beyond.
