Japanese automaker Nissan announced on June 3 that it was considering building cars for Chinese manufacturer Chery, which produces the Omoda and Jaecoo brands, at its plant in Sunderland in northeastern England.
Under a non-binding memorandum of understanding, the firm would "aim to begin manufacturing Chery International UK passenger vehicles on the plant's production Line One in financial year 2027", Nissan said in a statement.
The Sunderland factory would remain fully owned by Nissan with the site's team employed by the Japanese firm, it said.
The agreement comes amid a sharp slowdown in the European car market since 2019.
European manufacturers are burdened by factory overcapacity and are facing a price war with Chinese competitors, who are hampered by weak domestic demand and see Europe as a goldmine.
To improve sales in Europe, Chinese firms are now looking to produce on the continent, either by building factories or by acquiring existing ones.
Chery in 2023 acquired a former Nissan factory in Barcelona, Spain, where it now aims to produce 200,000 vehicles per year.
Nissan also sold its Rosslyn plant near Pretoria in South Africa to Chery this year.
Franco-Italian-American automaker Stellantis, whose brands include Peugeot, Fiat, Jeep and Chrysler, announced last month it was going to share its Spanish factories in Madrid and Zaragoza, as well as its under-used French factory in Rennes, with Chinese partners.
Other manufacturers, such as Ford and Volkswagen, are considering similar arrangements.
