Nissan has initiated discussions with Chinese automotive manufacturer Chery to potentially produce vehicles at its Sunderland facility, a move that could provide job security for thousands of workers at the UK’s largest car plant. The agreement, which is non-binding, aims to establish contract manufacturing for Chery by 2027, marking a significant step in Nissan’s strategy to bolster operations in the face of ongoing industry challenges.
Strategic Partnership on the Horizon
The Japanese carmaker announced on Wednesday that it has signed a preliminary agreement with Chery, which is partly state-owned. Both companies are currently in talks to iron out the details of the arrangement, with the goal of commencing production at Sunderland’s production line 1 during the 2027 financial year. If realised, this collaboration would not only enhance Nissan’s operational capacity but also reinforce the workforce of approximately 6,000 employees at the site.
Chery has been making significant inroads into the UK automotive market, recently introducing a variety of models under its brands, including the Jaecoo 7, a plug-in hybrid electric vehicle that topped UK sales in March. Massimiliano Messina, Nissan’s chair for European markets, expressed optimism about the partnership, 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.”
The Current Landscape of UK Automotive Production
The Sunderland factory is regarded as one of Europe’s more efficient manufacturing plants, currently producing popular models such as the Qashqai SUV, Juke crossover SUV, and the electric Leaf. However, the facility has faced difficulties due to the broader struggles of its Japanese parent company and a slow recovery in European car sales following the pandemic. In a recent restructuring effort, Nissan consolidated its production lines at Sunderland, freeing up resources for potential new partnerships without resulting in job losses.
Despite this consolidation, Nissan cut 900 jobs across Europe, including a small number in the UK, underlining the volatility of the current automotive sector. In 2025, the Sunderland plant’s production was reported at 273,000 vehicles, reflecting a 3% decrease from the previous year and highlighting the need for strategic alliances to enhance competitiveness.
The Rise of Chinese Manufacturers
Nissan’s exploration of collaboration with Chery comes at a time when Chinese automotive manufacturers are increasingly asserting their influence in the global market. Their ability to compete on price—bolstered by substantial state support and lower production costs—has posed a significant challenge to traditional European automotive firms. Nissan’s chief executive, Ivan Espinosa, previously indicated interest in partnerships with Chinese firms, including Dongfeng, signalling a broader trend among Western manufacturers to adapt to the competitive landscape.
Other European automotive giants are also recognising the strategic advantage of collaborating with Chinese manufacturers. For instance, Stellantis announced plans to produce vehicles for Leapmotor in Spain, while Ford is reportedly negotiating a sale of part of its Valencia facility to Geely. Volkswagen, too, has opened discussions with potential Chinese partners, reflecting a shift in strategy across the industry.
Commitment to the UK
Chery’s ambitions in the UK are evident, as the company aims to become one of the top three automotive manufacturers by sales within the country. Gary Lan, the UK chief executive of Omoda and Jaecoo, recently affirmed that producing vehicles domestically is a priority for Chery. Additionally, the establishment of a research and development centre for commercial vehicles in Liverpool underscores Chery’s long-term commitment to the UK market.
While Nissan and Chery have yet to disclose whether the collaboration will focus on hybrid or electric vehicles, the potential partnership represents a significant opportunity for both companies to thrive in an evolving automotive landscape.
Why it Matters
The potential partnership between Nissan and Chery signals a critical moment for the UK automotive industry as it faces substantial challenges from global competitors. By fostering collaborations with Chinese manufacturers, Nissan not only aims to secure jobs at its Sunderland plant but also positions itself strategically to enhance its production capabilities and remain competitive. As the automotive landscape continues to shift towards electrification and innovation, such partnerships could prove vital in sustaining the UK’s manufacturing sector and ensuring its resilience in the face of global market pressures.
