Nissan to explore possibility of manufacturing Chery vehicles at Sunderland plant
Nissan and Chery International UK recently signed a non-binding Memorandum of Understanding (MoU) opening up an opportunity for a study into contract manufacturing which could see Chery vehicles manufactured on a single production line at Nissan's UK plant in Sunderland from FY 2027.
Nissan recently production of three models from two production lines to one at its Sunderland plant
Nissan
In a statement in early June, Nissan said this non-binding MoU includes the possibility that Nissan would aim to begin manufacturing Chery International UK passenger vehicles on the plant's production Line One as soon as the 2027 financial year, which began in April this year.
Nissan has confirmed that, under the terms of its MoU with Chery International UK, it would remain the sole owner of the Sunderland facility and the team at the plant would continue to be employed by Nissan.
“This is an important step forward for our operations," commented Massimiliano Messina, chairperson of Nissan Africa, Middle East, India, Europe & Oceania (AMIEO). "We are looking forward to working with Chery International UK in the coming months to finalise a position that is optimal for both companies.”
Nissan's production line consolidation in Sunderland
This news comes shortly after Nissan's announcement in May that it would be consolidating production of its Leaf, Juke and Qashqai models at the Sunderland plant to a single production line (Line Two).This freed up Line One and cleared the way for talks with Chery to, as a spokesperson said, "assess future opportunities to secure full plant utilisation".
The decision to merge the two production lines in Sunderland came as part of the automaker's broader Re:Nissan recovery plan in which the company has been "taking decisive actions to enhance performance and create a leaner, more resilient business that adapts quickly to market changes" in reaponse to what it has described as "a challenging business environment".
Nissan to cut 900 jobs in Europe
Although Nissan stated that no jobs in the UK would be lost as a result of the merging of the two production lines at the Sunderland plant, it announced on the same day that it had begun talks with staff in Europe surrounding proposals including the partial closure of its warehouse in Barcelona and switching to an importer model for the Nordic markets.
“As part of the Re:Nissan approach, we have opened discussions with our European employees with a view to simplifying our structures, reducing complexity, and ensuring we operate in a sustainable and profitable way," a spokesperson explained.
As a result, Nissan confirmed around 900 jobs across Europe would be cut, representing approximately 10% of its European workforce. It has not yet confirmed which roles or regions are at risk of job losses.
Chery's growth in the UK market
Manufacturing Chery vehicles on UK soil would be a significant step for the automaker, representing the rapid growth of its brands in the UK market. Falling under the Chery International UK umbrella are marques including Chery, Omoda, Jaecoo and Lepas – a new EV brand set to launch in the UK later this year.
According to data from the Society of Motor Manufacturers and Traders (SMMT), the Jaecoo 7 has been the third-most popular new car so far in 2026, with more than 20,000 units registered in the UK for the year-to-date.
With Chery only having entered the UK market in August 2024 with its Jaecoo and Omoda brands – later introducing the Chery brand and soon its fourth UK marque in Lepas – the market penetration and rapid infrastructural growth of Chery brands reflects the famous "China speed" that Chinese OEMs are known for.
As sales have grown, so too has Chery's retailer network – reaching a total of 126 dealerships in Great Britain by May this year.
So alongside this growth, exploring UK production seems like a natural next step for Chery as it pursues its "In UK, for UK, be UK" strategy.
Localisation a growing trend for Chinese OEMs in Europe
If a contract manufacturing deal between Chery and Nissan is reached for production at Nissan's Sunderland plant, it would be the first large-scale UK production of Chinese-brand passenger vehicles. This would be significant for the country's automotive sector and signal a potential shift towards UK-based manufacturing for other Chinese OEMs currently importing vehicles to the UK.
However, it would not be the first deal of its kind in Europe; in fact, this MoU represents a growing trend of Chinese OEMs investing in localised production and supply chains in Europe.
For example, Leapmotor and Stellantis recently confirmed plans to to begin full-scale European production at two Stellantis sites in Spain – it Figueruelas plant in Zaragoza and its Villaverde plant in Madrid. Shortly afterwards, the two companies' joint venture Leapmotor International (LPMI) announced the continued expansion of its logistics partnership with the Grimaldi Group to support its ambitions in Europe.
Meanwhile, MG's parent company SAIC Motor confirmed plans to establish its first mainland European manufacturing facility in Galicia, Spain. Construction of a €200m ($227m) industrial and logistics complex in the region is set to begin in 2027, combining vehicle production, research and development, component supply, and logistics operations.
At ALSC Europe earlier this year, Tatiana Hristov, director of EMEA light vehicles sales forecast at S&P Global Mobility, shared forecasts highlighting a move away from export-first strategies for Chinese OEMs in Europe over the next decade, moving towards increased localisation in order to win greater market share.
"Chinese OEMs will focus on not only bringing their cars to Europe, but also developing cars in Europe for Europe, focusing on local demand specific to European customers," Hristov said.
Increased localisation could also address concerns over the growing trade imbalance in Europe, with Eurostat data showing that EU passenger car exports increased by just 1.6% in 2025, while imports rose by 11%. This issue was highlighted by Namrita Chow, business analyst and global alliances lead at ECG, during the association's Spring Congress in June.
"It doesn't take serious maths to figure out imports are rising way faster than exports," said Chow. "And if the situation continues, it'll be a serious problem for the EU and Europe in total, because the with the actual volume of exports from the Europe, from the EU, the surplus is declining by a shocking rate of like 41% annually, and that trade surplus is something we want to reverse.
