Nissan Explores Manufacturing Partnerships at Sunderland
Nissan’s chief executive has confirmed the company is open to manufacturing vehicles for other automakers at its Sunderland plant, the largest car factory in the UK, amid ongoing discussions with Chinese automaker Chery.
Ivan Espinosa, Nissan’s CEO, stated that the company is "looking at options" for the Sunderland facility and its 6,000 employees, following the announcement of significant financial losses for the fiscal year ending March.
Last week, Nissan revealed it would be closing one of its two production lines at Sunderland due to declining demand for its vehicles. Despite this, industry sources indicate that Nissan has engaged in talks to produce vehicles on behalf of Chery, which is aggressively expanding its presence in the UK and European markets with its electric vehicle offerings.
When questioned about the discussions with Chery regarding Sunderland, Espinosa remarked:
"The plant is operating well, is a viable plant. The problem that we have at this location is the volume. So if we can find a smart way of bringing more volume in, we might consider doing something."
He further added:
"There is nothing specific about any partner to announce today, or any options, but this is something that we would likely look into considering."
European Carmakers and Chinese Firms Collaborate on Factory Use
Several established European automakers have been exploring opportunities to share factory space with Chinese manufacturers. Ford, for example, has reportedly held discussions with Geely regarding the potential sale of part of its Valencia plant in Spain. Additionally, Stellantis — the parent company of brands such as Fiat, Peugeot, and Vauxhall — announced last week plans to manufacture vehicles for Chinese automaker Leapmotor at its factories located in Madrid and Zaragoza.
Changan, another Chinese automaker, is in negotiations with Stellantis and other European manufacturers about possibly acquiring underutilized factories. Stella Li, Changan’s executive vice-president, stated at a Financial Times conference in London:
"We are talking to not only Stellantis, we’re talking to other companies too. We are looking for any available plant in Europe because we do want to utilise this kind of spare capacity."
Sales of Chinese-made vehicles in Europe have surged in recent months, as Chinese manufacturers leverage lower production costs to offer competitively priced cars. Several European firms have concluded that partnering with Chinese competitors to utilize underused plants is a pragmatic approach to reducing their own manufacturing expenses.
Impact on Nissan’s European Operations and Financial Performance
Although Nissan’s European operations represent a relatively small segment of its global business, the Sunderland plant has been affected by the company’s worldwide challenges. Recently, Nissan announced the consolidation of two production lines manufacturing the Juke, Leaf, and Qashqai models, alongside plans to cut 900 jobs across Europe, including a limited number of roles at UK offices.
On Wednesday, Nissan reported a net loss of ¥533 billion (£2.5 billion) for the last financial year. Operating profits declined nearly 12% compared to the previous year, falling to ¥58 billion, with expectations to increase to ¥200 billion in the following year.
Espinosa, who was appointed Nissan CEO a year ago with a mandate to reduce costs and restore profitability, emphasized the importance of collaboration. He stated:
"I want Nissan to become capable of collaboration with external partners, because this is what the environment is asking us to do."
Nissan faced significant challenges over the past year, including tariffs imposed by the Trump administration on imports to the US and intense competition in the Chinese market. Despite these obstacles, Espinosa noted that the company’s progress has been steady amid an uncertain operating environment.
"Progress has been steady, despite an uncertain operating environment," he said.
