Nissan Plant in Britain to Produce Chery Cars

Nissan's plant in Britain will be used to produce Chery cars, as the Chinese manufacturer steps up to utilize its unused overseas production capacity. (Source: Yicai Global)

JAKARTA - Nissan's factory in Sunderland, England, will be used to produce Chery Automobile passenger cars. This step shows how Chinese manufacturers expand the global market: using unused foreign factory capacity.

Citing a report from Yicai Global, Saturday, June 6, Nissan and Chery International UK have signed a non-binding agreement to explore contract production at the Sunderland plant.

The factory remains wholly owned and operated by Nissan. All workers also remain under Nissan.

This cooperation is expected to help increase the utilization of the Sunderland plant. Last year, the level of capacity utilization of the plant was below 50 percent because the adoption of electric vehicles in Europe was slower than expected.

Sunderland is Nissan's last production base in the European region. This factory is also an important part of the company's electrification strategy.

Production for Chery is expected to begin on Sunderland's first line in fiscal year 2027. Previously, Nissan would move existing models to the second line to increase efficiency.

This scheme could be a new pattern of cooperation between Chinese manufacturers and global automotive manufacturers. One party needs access to production abroad. The other party needs its factories to work more optimally.

Nissan is undergoing a major restructuring through its Re:Nissan plan after posting a sharp loss in fiscal 2024. The program targets a reduction in the number of global vehicle plants from 17 to 10 by the end of fiscal 2027 and the reduction of around 20,000 jobs.

Even so, Sunderland is still maintained and continues to be directed towards the production of electric vehicles.

However, the transition to electric vehicles in Europe has not been as fast as hoped. According to Japanese automotive research institute MarkLines, the utilization rate of Sunderland's capacity is only 45.5 percent by 2025.

Last month, Nissan moved production of existing models to a second line. The first line was then prepared for OEM work for Chery starting in fiscal year 2027. OEM means production is carried out by one company for another company's brand.

This cooperation is not a single step for Chery. The manufacturer from Wuhu has previously also moved aggressively to utilize overseas production assets, including former Nissan facilities.

In 2024, Chery and Spain's EV Motors acquired Nissan's Barcelona plant to produce Ebro-branded vehicles.

In January this year, Chery also agreed to buy Nissan's factory in Rosslyn, South Africa. The transaction is expected to be completed by mid-year.

According to Yicai Global, other Chinese car manufacturers are also starting to expand their manufacturing footprint overseas.

Stellantis is said to provide OEM services for Dongfeng Motor at the Rennes-la-Janais plant, western France. Meanwhile, several media outlets have reported that Geely Auto has reached an agreement with Ford Motor to acquire the Body 3 vehicle body assembly line at the Ford Valencia plant, Spain.

This move shows that Chinese manufacturers are increasingly active in using overseas production capacity to accelerate global expansion.