Nissan said Wednesday it had signed a non-binding memorandum of understanding with Chery International UK and that discussions were ongoing over contract manufacturing at the Sunderland plant’s production line 1. If the agreement is finalized, the Japanese automaker said it would aim to begin assembling vehicles for Chery in the 2027 financial year.
Massimiliano Messina, chair for several regions including Europe, described the preliminary deal as “an important step forward for our operations.” He said Nissan looked forward “to working with Chery International UK in the coming months to finalise a position that is optimal for both companies.”
The Sunderland factory, which produces the Qashqai SUV, the Juke crossover, and the electric Leaf, has long been regarded as one of Europe’s most efficient auto plants. But it has struggled with underutilized capacity as European car sales remain below pre-pandemic levels and Nissan’s parent company grapples with a painful restructuring. The site built 273,000 vehicles in 2025, down 3% from the prior year, against a theoretical maximum of about 600,000.
Last month Nissan consolidated production into a single factory line, a move that did not involve job losses but opened the door for a partner to use the other line. The company also cut 900 positions across Europe, including a small number of office roles in the UK.
Steve Bush, national officer at Unite, the union representing Nissan workers, called the potential partnership “very good news for Nissan’s Sunderland workers and the UK’s automotive industry in general at a time of uncertainly for the sector.” He added: “Chinese vehicles are increasingly visible on British roads so it makes sense for UK workers to build them here as well.”
The deal would extend a growing pattern of European automakers teaming up with Chinese rivals rather than trying to fend them off. Stellantis, the owner of Peugeot, Fiat, and Vauxhall, announced last month it would produce cars for China’s Leapmotor in Spain. Ford has reportedly agreed to sell a portion of its Valencia, Spain plant to Geely. Volkswagen has said it is open to working with Chinese partners.
Chery, which is part-owned by the Chinese state, has already bought two former Nissan plants: it began production in April at a facility in Ebro, near Barcelona, and it purchased a plant outside Pretoria, South Africa, in January. The company sells vehicles in the UK under the Chery, Omoda, and Jaecoo brands. Its Jaecoo 7 plug-in hybrid electric vehicle became the UK’s top-selling model in March 2026.
Gary Lan, the UK chief executive of Omoda and Jaecoo, said last month that Chery aimed to become a “top three” manufacturer by sales in Britain and signaled that local production was on its agenda. Chery has also opened a research and development headquarters for commercial vehicles in Liverpool.
David Bailey, a professor of business economics at the University of Birmingham, characterized the potential deal as “a historic deal.” He said: “Twenty years ago Chinese brands were trying to break into Europe. 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’s chief executive, Ivan Espinosa, said last year that the company was considering manufacturing vehicles with Dongfeng, another Chinese automaker. The companies have not said whether Nissan would produce hybrid or electric cars for Chery at Sunderland.
The British government had previously floated the possibility of Jaguar Land Rover building cars for Chery, but a senior executive at the UK’s largest automotive employer said that idea was not under serious consideration.