Chinese cars are set to be built in Britain for the first time after Nissan struck a deal to use spare production capacity at its Sunderland plant in Tyne and Wear with rival Chinese manufacturer Chery.
The agreement, announced by Nissan on Wednesday, will see the Japanese carmaker manufacture vehicles for Chery — the parent company of Jaecoo and Omoda — from next year, subject to ongoing negotiations.
The deal remains non-binding, with final details still to be confirmed, including which models will be produced.
What does the Nissan and Chery deal involve?
Nissan said it is looking to make better use of spare capacity at its Sunderland factory, which can build more than 500,000 vehicles a year but has recently been operating well below that level due to weaker demand.
Under the proposed arrangement, production of Chery-branded vehicles would begin in the UK for the first time, marking a significant shift in the British automotive manufacturing landscape.
Until now, Chinese firms such as SAIC Motor and Geely have only produced vehicles in the UK under historic British marques including MG, Lotus and The London Taxi Company.
The move reflects the rapid growth of Chinese car brands in the UK market, where companies such as Jaecoo, Omoda and BYD have gained market share by undercutting established Western competitors on price.
Why is Nissan making the deal?
Nissan’s Sunderland plant has seen output fall in recent years. The company sold around 28,400 vehicles in the UK in the first four months of this year, a 13 per cent drop compared with the same period last year, according to industry data, reports the Daily Telegraph.
By contrast, Chinese brands have seen rapid growth. Jaecoo sales surged from around 4,300 to 22,800 vehicles in the same period, while Omoda rose from 4,100 to 12,300.
BYD also recorded strong growth, increasing sales from 11,900 to 26,400 vehicles.
Industry analysts say the agreement could help strengthen Nissan’s UK operations while giving Chery a manufacturing foothold in Europe.
What have the companies said?
Massimiliano Messina, Nissan’s European chairman, 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.”
A spokesperson for Chery said the arrangement formed part of an “ongoing evaluation of future opportunities in the UK market”.
They added: “The UK remains a strategically important market for Chery Automobile Group, and the company will continue to explore opportunities that support its long-term ambitions while creating value for customers, retailer partners and the local industry.”
Union officials welcomed the move, saying it could support jobs at the Sunderland plant.
Steve Bush, Unite the Union’s national officer for automotive, said: “Chinese vehicles are increasingly visible on British roads, so it makes sense for UK workers to build them here as well.”
