In a significant development for the British automotive sector, Nissan has initiated discussions with Chinese car manufacturer Chery regarding a potential agreement to assemble vehicles at its Sunderland plant. This non-binding agreement, if finalised, could mark the beginning of mass-market production for Chinese automotive brands in the UK, while simultaneously safeguarding approximately 6,000 jobs at the country’s largest car factory.
A New Era for Sunderland
The talks between Nissan and Chery signal a pivotal moment not only for the Sunderland facility but for the entire UK automotive landscape. The collaboration aims to start production in the financial year 2027, with Nissan potentially manufacturing vehicles for Chery International UK. This strategic move is expected to bolster employment at a site that has been operating well below its capacity, which stands at around 600,000 vehicles annually. In 2025, only 273,000 cars were produced, reflecting a concerning decline in output.
Massimiliano Messina, chairman for several regions including Europe, emphasised the importance of this partnership, noting, “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.”
Addressing Industry Challenges
The Sunderland factory is renowned for its efficiency, being responsible for the production of popular models such as the Qashqai SUV, the Juke crossover, and the electric Leaf. However, the site has faced challenges due to wider issues affecting Nissan’s global operations, including the restructuring of its Japanese parent company and a sluggish recovery in European car sales post-pandemic.
Recently, Nissan consolidated its production lines in Sunderland, which paved the way for this potential collaboration with Chery. Despite cutting 900 jobs across Europe, including a few in the UK, the company has managed to avoid job losses at the Sunderland site, which is crucial as it explores new manufacturing opportunities.
Chery’s Growing Presence in the UK
Chery has been actively increasing its market presence in the UK, introducing various models under its brands, including Chery, Omoda, and Jaecoo. The Jaecoo 7, a plug-in hybrid electric vehicle (PHEV) produced in China, recently emerged as the best-selling car in the UK for March. This growing visibility of Chinese vehicles on British roads highlights the shifting dynamics in the automotive industry, where local production could soon become a reality.
Steve Bush, a national officer at Unite, the union representing Nissan workers, welcomed the news, stating, “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.”
The Competitive Landscape
The involvement of Chinese manufacturers in the UK automotive sector reflects a broader trend where traditional European carmakers face mounting pressure from their Asian counterparts. With state subsidies, competitive labour costs, and dominance in battery production, Chinese companies have gained an edge, particularly in the electrified vehicle market. David Bailey, a professor of business economics at the University of Birmingham, called the potential Nissan-Chery deal “historic,” marking a significant shift in the industry’s landscape.
Nissan’s exploration of partnerships with Chinese firms is not new; the company had previously sold two plants to Chery and is considering collaborations with other manufacturers, including Dongfeng. Meanwhile, other European carmakers are also adapting to this new reality, as evidenced by Stellantis and Ford’s recent agreements to produce cars for Chinese brands.
Chery has expressed ambitious goals to become a top three manufacturer in the UK by sales, further solidifying its commitment to local production. The establishment of a research and development centre for commercial vehicles in Liverpool underscores this intention.
Why it Matters
This potential partnership between Nissan and Chery represents a significant turning point for the UK automotive industry, which is grappling with challenges in a rapidly evolving market. By embracing collaboration with Chinese manufacturers, UK-based production could see a revitalisation, offering not only job security for thousands but also enhancing the country’s position in the global automotive supply chain. As the industry shifts towards electrification and innovation, this deal could pave the way for a more resilient and competitive automotive sector in the UK.