China’s Chery poised to strike deal with Nissan to build cars at Sunderland plant

Chery is on the cusp of building its first manufacturing presence in the UK in the latest sign of Chinese carmakers gaining a major foothold in Britain’s electric vehicle market.

The Omoda and Jaecoo owner, which is the third largest carmaker in China, has unveiled a non-binding memorandum of understanding (MoU) with Nissan to explore assembling its vehicles in its Sunderland plant.

The move, which comes after rival BYD said it was exploring constructing a major European EV factory in Spain, follows a similar strategic play by Chery in Spain where the firm resurrected a former Nissan plant to launch production in partnership with Spanish automaker Ebro in a deal which has brought automotive manufacturing back to the region.

The MoU between Nissan and Chery will be welcome news for employees of the Sunderland plant, coming just a month after Nissan’s announcement that it was closing one of its two production lines there. 

In a joint statement, the two carmakers said that “Nissan would aim to begin manufacturing Chery International UK passenger vehicles on the plant’s production Line One in financial year 2027”.

The potential tie-up is the latest sign of Chinese carmakers eyeing the UK market as a major opportunity for growth in the coming years, with early signs Brits are embracing their cut-price alternatives to major European and American vehicle brands.

Last month, DVLA car registration data revealed car brand BYD had outpaced demand for Land Rover vehicles in the UK for the second consecutive quarter, while MG owner SAIC had exceeded sales of German car giant Mercedes.

The UK’s lack of tariffs on Chinese cars compared to Europe and the US continue to provide preferential conditions for firms such as Chery, sweetening the attractiveness of setting up manufacturing facilities in Britain.

If successful, the move could set a new precedent for Chinese firms manufacturing in the UK and could ease concerns of job losses associated with China’s rise in the automotive industry.