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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 and begin mass-market Chinese car production in Britain for the first time.
The Japanese carmaker said on Wednesday 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 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.
A Chery deal will give job security for about 6,000 workers. The site is running far below its maximum capacity of about 600,000 cars – in 2025, Sunderland produced 273,000 cars, down 3% on the prior year.
Steve Bush, national officer at Unite, a union representing Nissan workers, said: “This is very good news for Nissan’s Sunderland workers and the UK’s automotive industry in general at a time of uncertainly for the sector. Chinese vehicles are increasingly visible on British roads so it makes sense for UK workers to build them here as well.”
Nissan’s chief executive, Ivan Espinosa, had said last year that the company was considering making cars with Dongfeng, another Chinese carmaker.
The arrival of Chinese manufacturers as a major force in the automotive industry has put enormous pressure on traditional European rivals. Chinese carmakers have been able to undercut European rivals particularly on electrified cars because of large state subsidies, lower labour costs and the country’s dominance in the battery industry.
David Bailey, a professor of business economics at the University of Birmingham, said it would be “a historic deal”.
“Twenty years ago Chinese brands were trying to break into Europe,” he said. “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.”
Nissan had previously sold two other plants to Chery. The Chinese carmaker started production in April at a plant in Ebro, near Barcelona; it bought another plant outside Pretoria, South Africa, in January.
Other European carmakers have also decided to work with Chinese carmakers, rather than trying to defend their market share. Stellantis, owner of brands including Peugeot, Fiat and Vauxhall, last month said it would produce cars for China’s Leapmotor in Spain and America’s Ford has reportedly agreed to sell part of its plant in Valencia, Spain, to Geely.
Volkswagen has also said it is open to working with Chinese partners, although Xiaopeng, a potential partner, last month said the German factories were “a little bit old”.
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.
The companies did not say whether Nissan would produce hybrid or electric cars for Chery in the UK.
The British government had raised the possibility of Jaguar Land Rover building cars for Chery, although a senior executive at the UK’s biggest automotive employer said that that was not under serious consideration.
