Nissan and Chery Partner to Utilise Sunderland Plant Capacity in UK

Nissan has signed a non-binding memorandum of understanding (MoU) with Chery to make use of unused manufacturing capacity at its Sunderland production facility in the United Kingdom. The agreement, announced on June 3, 2026, will allow Chery to utilise Nissan’s “Line 1” production line, with manufacturing activities expected to commence during the 2027 fiscal year. The move forms part of Nissan’s broader strategy to optimise production resources globally while improving operational efficiency across its manufacturing network.

Nissan Advances Manufacturing Consolidation Strategy

Earlier, Nissan decided to consolidate production of the Leaf, Qashqai, and Juke models onto “Line 2” at the Sunderland facility. The decision was made as part of an extensive cost-reduction and restructuring programme aimed at improving profitability and reducing excess capacity. Nissan CEO Ivan Espinosa stated that securing a partner for the underutilised production line was an important element of the company’s structural reform agenda. The Chery agreement provides a practical solution by bringing additional production activity to the facility without requiring Nissan to expand its own manufacturing volumes.

Chery Strengthens Its Presence in the UK and Europe

While Chery has not disclosed which vehicles will be produced at Sunderland, the automaker has steadily expanded its position in the UK market through brands such as Jaecoo, Omoda, Lepas, and its core SUV portfolio. Collectively, these brands have secured nearly 7% of the UK automotive market over the last two years. The Sunderland arrangement aligns with Chery’s wider European growth strategy, which also includes cooperation with Spanish automotive brand Ebro to manufacture vehicles at a former Nissan facility near Barcelona in Spain.

Key Details of the Nissan-Chery Sunderland Agreement

Nissan Continues to Face Financial Challenges

The partnership arrives during a difficult financial period for Nissan. On May 13, 2026, the company reported a net loss of 533.1 billion yen (USD 3.53 billion) for fiscal year 2025, representing its second consecutive year of substantial losses. Management attributed the performance to sluggish global vehicle demand, inflationary pressures, and the impact of U.S. tariff policies. According to the company, tariff-related effects reduced operating profit by approximately 286 billion yen (USD 1.9 billion). Espinosa also cautioned that elevated energy costs linked to geopolitical developments in the Middle East could continue to create challenges throughout fiscal year 2026.

Chery Records Strong Sales and Export Growth

In contrast, Chery continues to demonstrate strong business momentum. During May 2026, the group reported sales of 247,823 vehicles, representing a year-on-year increase of 20.5%. New energy vehicle sales reached 100,304 units, growing 58.8% compared with the same period last year. The company also exported 181,871 vehicles during the month, marking its third consecutive month of record export performance.

For the first five months of 2026, Chery achieved cumulative sales of 1,100,921 vehicles, up 7.2% year-on-year. Export volumes reached 752,755 units over the same period. The company’s global user base has surpassed 19.62 million customers, including more than 6.59 million users outside China. These results highlight the company’s growing international footprint and provide additional context for its interest in expanding manufacturing operations within Europe.

Frequently Asked Questions

Why is Chery using Nissan’s Sunderland production facility?
Chery will use Nissan’s Sunderland Line 1 facility to support its expanding presence in the UK and European markets while helping Nissan optimise unused manufacturing capacity. The agreement allows Nissan to improve plant utilisation as part of its restructuring programme and gives Chery access to an established production base in Europe. Operations are expected to begin in fiscal year 2027, although the specific vehicle models that will be produced at the facility have not yet been announced.

How does this partnership benefit Nissan and Chery?
Nissan benefits by reducing idle manufacturing capacity and advancing its global cost-efficiency initiatives. Chery gains an opportunity to strengthen its European manufacturing footprint and support growing vehicle demand across the region. The arrangement aligns with Nissan’s structural reforms while complementing Chery’s broader international expansion strategy. Both companies can leverage existing infrastructure more effectively, potentially improving operational efficiency and long-term competitiveness in the evolving automotive market.