Nissan has signed a non-binding memorandum of understanding with Chinese automaker Chery that will see part of its Sunderland manufacturing site in the United Kingdom repurposed for third-party production, marking another significant shift in the global automotive landscape.

Under the agreement, Chery will utilise Nissan’s “Line 1” facility from the 2027 fiscal year, while Nissan consolidates production of its core models—including the Leaf, Qashqai, and Juke—onto “Line 2” as part of a wider restructuring programme aimed at cutting costs and improving efficiency.

The deal reflects Nissan’s efforts to optimise global capacity amid ongoing financial pressure, including a reported net loss of 533.1 billion yen [£2.5 billion] for the 2025 fiscal year.

The arrangement also underscores Chery’s accelerating expansion beyond China. The company, which has been rapidly growing exports and strengthening its European footprint through brands such as Omoda, Jaecoo and Lepas, is expected to introduce vehicles built in Sunderland, although specific models have not yet been confirmed.

This follows similar moves by Chery in Spain, where it is partnering on production at a former Nissan facility in Barcelona.

For Nissan, the agreement provides a potential lifeline for unused production capacity at a time of global uncertainty, rising costs, and trade pressures. For Chery, it offers a strategically valuable manufacturing base within the UK, strengthening its presence in one of Europe’s key automotive markets.

The partnership reflects a broader industry trend in which Chinese automakers are increasingly leveraging established global manufacturing assets, while traditional manufacturers recalibrate operations in response to slowing growth and intensifying competition in the electric vehicle sector.