Nissan has reportedly held talks with Chinese automaker Chery about a potential collaboration at its UK manufacturing facility. According to the Financial Times, the discussions are centred around building vehicles at Nissan’s Sunderland plant as both companies explore ways to better utilise existing production capacity.
If an agreement is reached, it could support Chery’s gradual expansion in the UK, where the brand is already beginning to establish a presence.
Sunderland Plant Operating Below Full Capacity
One of the key reasons behind the discussions is the current utilisation of Nissan’s Sunderland factory. The plant is reportedly operating at around 50 percent capacity, leaving significant room for additional production.
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For Nissan, improving efficiency at the site is becoming increasingly important. The facility is one of the company’s most significant manufacturing hubs in Europe and employs around 6,000 people, making its long term stability a priority. The layout of the plant, with separate production lines across different buildings, could make it easier to accommodate additional manufacturing partners without major structural changes.
Talks Are Not Limited To Chery
The discussions with Chery appear to be part of a broader effort by Nissan to find ways to maximise factory output. Reports suggest that the company has also explored similar conversations with other automakers, although none have resulted in confirmed partnerships so far.
Importantly, sources familiar with the matter indicate that the talks with Chery may not necessarily lead to a final deal, underlining the early stage nature of these negotiations. This reflects a wider trend in the automotive industry, where manufacturers are becoming more open to sharing production facilities as costs rise and demand becomes less predictable.
Part Of A Broader Restructuring Strategy
Nissan’s interest in partnerships comes as the company continues a wider restructuring effort aimed at improving efficiency and reducing costs. The automaker has already announced plans to streamline operations globally, including plant closures and workforce reductions.
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At the same time, the company is continuing to invest in new electric models, with vehicles like the next generation Leaf and a future electric Juke expected to support production volumes at Sunderland in the coming years.
However, these models alone may not be enough to fully utilise the factory’s capacity, which helps explain why external partnerships are being considered.
Chery Continues To Expand Its Global Manufacturing Footprint
For Chery, the discussions align with its broader strategy of expanding production outside China. The company has been actively exploring partnerships and acquisitions to establish a stronger presence in international markets.
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Recent moves include taking over former Nissan production facilities in markets such as Spain and South Africa, allowing the brand to scale up manufacturing without building entirely new plants from scratch. A potential collaboration in the UK would follow a similar pattern, giving Chery access to an established European production base while helping Nissan improve factory utilisation.
Chery Continues To Expand Its Global Manufacturing Footprint
For Chery, the discussions align with its broader strategy of expanding production outside China. The company has been actively exploring partnerships and acquisitions to establish a stronger presence in international markets.
That strategy is already starting to show clear results in the UK. Chery and its related brands have grown quickly, with the group reaching around 2.7% market share in 2025, and contributing to a broader surge of Chinese manufacturers in the market. More recent data suggests that growth has continued into 2026, with Chery and its associated brands helping Chinese automakers reach around 5.8% market share in the UK in the first months of the year.
What This Could Mean For The UK And European Market
If a deal between Nissan and Chery goes ahead, it would be a fairly practical outcome for both sides rather than a dramatic shift. For Nissan, it would help improve utilisation at the Sunderland plant, which is currently running at around half capacity, a key concern as the company continues its wider restructuring efforts. For Chery, it would offer a faster route into local European production without the time and cost of building a new factory from scratch.
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In the broader UK context, this would also reinforce how quickly the market is changing. Chery has already been gaining traction in the UK alongside other Chinese brands.
More generally, it reflects a wider shift in the industry where underused factories are becoming opportunities for collaboration rather than long term inefficiencies. With strong competition already present in the UK, manufacturers are under increasing pressure to optimise costs and localise production where possible.
FAQ
What are Nissan and Chery discussing?
They are in early talks about the possibility of building cars at Nissan’s Sunderland plant in the UK.
Is the Sunderland plant currently fully utilised?
No, it is operating at around 50 percent capacity, which is one of the reasons for exploring partnerships.
Is a deal between Nissan and Chery confirmed?
No, the discussions are still ongoing and may not result in a final agreement.
Why is Chery interested in UK production?
Local production in Europe could help Chery strengthen its position in the UK market and support its wider expansion strategy.
How strong is Chery’s presence in the UK?
Chery and its associated brands have grown quickly, reaching around 2.7 percent market share in 2025 and about 5.8 percent in early 2026.
What would Nissan gain from this partnership?
Improved factory utilisation, lower fixed costs, and better efficiency at its Sunderland plant.
Featured Image Credit: Nissan
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