Nissan maps out deal to build cars for Chery at its Sunderland plant

Nissan has agreed to look at building cars in northern England for Chinese manufacturer Chery, in a move that would secure jobs at the UK’s largest car factory.

The Japanese carmaker on Wednesday said it had signed a non-binding agreement and that discussions were ongoing over contract manufacturing by Nissan for Chery, which is part-owned by the Chinese state.

If the deal goes ahead, Nissan would aim to begin manufacturing cars for Chery International UK at Sunderland’s production line 1 in the 2027 financial year.

Chery has poured cars into the UK in recent months under its Chery, Omoda and Jaecoo brands. The Jaecoo 7, a plug-in hybrid electric vehicle (PHEV) built in China, became the top-selling model in the UK in March.

Massimiliano Messina, chair at Nissan for markets including Europe, said: “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 Nissan Sunderland factory, where about 6,000 workers are employed, is widely seen as one of the more efficient plants in Europe, producing the Qashqai SUV, the Juke crossover SUV, and the electric Leaf. However, it has suffered from turmoil in its Japanese parent company and the failure of European car sales to recover to pre-pandemic levels.

Nissan is going through a painful global restructuring process, including the closure of several plants in Japan.

The company last month consolidated production at Sunderland into one of its two factory lines. That move, which did not involve a loss of jobs, opened the way for a Chinese entrant to build on its own line. At the same time, the company cut 900 jobs across Europe, including a small number of office roles in the UK.

Nissan’s chief executive, Ivan Espinosa, had said last year that the company was considering making cars with Dongfeng, another Chinese carmaker.

Gary Lan, the UK chief executive of Omoda and Jaecoo, said last month that Chery wanted to be a “top three” manufacturer by sales in Britain, and made clear that producing vehicles in the UK was on its agenda within the next few months. Chery has also opened a research and development headquarters for commercial vehicles in Liverpool, in a further sign of its commitment.