Nissan's chief executive has confirmed that the company is considering building cars for other manufacturers at its Sunderland plant, the UK's largest car factory, amid talks with China's Chery. Ivan Espinosa said Nissan was "looking at options" for the site and its 6,000 workers as the struggling Japanese carmaker reported steep losses for the year to March.
Nissan's Struggles and Chery Talks
Last week, Nissan announced it would close one of its two production lines in Sunderland, North East England, due to falling demand. However, according to industry sources, the company has held talks with Chery to produce vehicles on its behalf. Chery is aggressively expanding into the UK and Europe with its Chery, Jaecoo, and Omoda brands.
Asked about the Chery talks, Espinosa said: "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 added that there was "nothing specific about any partner to announce today, or any options, but this is something that we would likely look into considering."
European Carmakers Sharing Factory Space
Several European carmakers have discussed sharing factory space with Chinese manufacturers. Ford has reportedly held talks with Geely over the sale of part of a plant in Valencia, Spain. Stellantis, owner of Fiat, Peugeot, and Vauxhall, announced last week it would build cars for Leapmotor at its factories in Madrid and Zaragoza.
BYD, the world's largest electric car maker, is negotiating with Stellantis and other European carmakers over potentially taking over underused factories, according to Stella Li, the Chinese firm's executive vice-president. "We are talking to not only Stellantis, we're talking to other companies too," Li said at a Financial Times conference in London. "We are looking for any available plant in Europe because we do want to utilise this kind of spare capacity."
Chinese Car Sales Surge in Europe
Sales of Chinese-made cars in Europe have soared recently, as Chinese manufacturers undercut European rivals due to lower costs. Several European firms have concluded it is better to accept offers from Chinese competitors for underused plants to reduce their own manufacturing costs.
Nissan's European operations are a relatively minor part of its global business, but the Sunderland plant has been affected by the company's global struggles. Last week, it announced the merger of two lines producing the Juke, Leaf, and Qashqai models, along with 900 job cuts across Europe, including a small number of UK office roles.
Nissan's Financial Performance
On Wednesday, Nissan posted a net loss of ¥533bn (£2.5bn) for the last financial year. Operating profits fell nearly 12% from the previous year to ¥58bn, with that figure expected to reach ¥200bn next year. Espinosa, who became CEO a year ago with a mandate to cut costs and restore profitability, said he wanted Nissan to become capable of collaboration with external partners "because this is what the environment is asking us to do."
Nissan was hit hard last year by Donald Trump's tariffs on imports to the US and tough competition in China. Nevertheless, Espinosa said the company's "progress has been steady, despite an uncertain operating environment."
