Nissan signs deal with China's Chery to build cars at its UK Sunderland plant

EVwire brief: Nissan will build cars for China's Chery at its Sunderland plant, the UK's biggest vehicle factory, under a newly signed deal aimed at safeguarding the site's long-term future.

The agreement is a nonbinding memorandum of understanding, with production of Chery models at Sunderland targeted to begin from next year. The plant employs around 6,000 people and builds the new Nissan Leaf. However, its future had been cast into doubt by a sweeping restructuring at the Japanese group, which is closing factories and cutting 20,000 jobs worldwide.

Nissan said last month it would merge Sunderland's two production lines into one and bring in outside partners to lift the plant's utilization, which has been running at roughly 50%. The Chery tie-up is the first such partner to emerge.

Beyond the Leaf, Sunderland is also set to build the electric Juke once that model goes on sale in 2027.

Context:

A completed deal would be a lift for British vehicle manufacturing. The UK government has set a target of 1.3 million vehicles a year by 2035. The Society of Motor Manufacturers and Traders (SMMT) expects only about 824,000 to be built in the country this year, and industry watchers have warned that the 2035 goal would be out of reach without Chinese brands expanding their UK footprint.

Among Chinese players, Chery has been the fastest riser in Britain, taking a 6% market share over the year's first four months, per the SMMT. Its UK lineup spans Chery’s namesake brand plus its Omoda and Jaecoo marques.

Nissan is not the only one exploring this route. Over the past year, Ford, Stellantis and Volkswagen have all held talks with Chinese groups such as Geely and Xpeng about putting idle European plant capacity to use amid soft demand and high production costs.

Source: Financial Times

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