Nissan faces 'uncomfortable' pressure from Chinese brands

As a manufacturer operating in the volume segment, Nissan is one of the most vulnerable to fast-charging Chinese importers. “The Chinese are putting us in an uncomfortable situation,” Max Messina, Nissan’s new head of the European region, told Autocar recently. “The pressure on the margins has been very significant.” Nissan was once itself a leading threat to the British car industry, with its quality imports from Japan, but then the company was persuaded to locate manufacturing to Sunderland and became a local hero. After beginning production in 1986 with the Bluebird, Nissan rose to become one of the two biggest car makers in the country, along with JLR. Now, however, Nissan is the local player on the back foot and the Chinese are the upstarts, with the likes of MG, Jaecoo and BYD luring away Qashqai buyers with high-spec, high-value hybrids and electric SUVs. Last year, Chinese makers accounted for 9.7% of the UK's new car sales - rising to 12.7% for new EVs. Sunderland’s output – comprising the Qashqai, Juke and new Leaf crossover – is sold across the continent, but its biggest market is here in the UK. We account for around a third of Nissan’s European sales in total, followed by Spain and Italy. It’s Nissan’s misfortune that those are also the three biggest markets for Chinese car brands in Europe. Nissan’s financial problems are a global issue, after recording a £3.8 billion net loss in the financial year to the end of April 2025, but Europe has been consistently one of its worst-performing regions, losing the equivalent of £172.2 million in the six months from April to September 2025. Despite this, Nissan has consistently backed its Sunderland plant after closing its only other European manufacturing base – in Barcelona, Spain – in 2021. But with new CEO Ivan Espinosa targeting the equivalent of £2.4bn in cost cuts globally with his Re:Nissan plan, the company’s European operations are under scrutiny like never before. Messina’s previous roles as Nissan’s CFO for the region including Europe and as an automotive turnround specialist at consultantcies including KPMG make him the ideal person to trim the fat. “Each day, each month, I sit down with my executive team and I count each euro that comes to my PnL [financial statement]”, he said. “We are marching towards our objectives.” Recent examples include cutting the main Qashqai line to just one shift, axing 250 jobs, and downsizing Nissan’s London design studio, announced in September. Stripping payroll has its limitations, however, with growth still a preferred option. Sunderland built 276,000 cars in 2025, almost half the plant's capacity of 500,000. The Leaf and Juke EVs are expected to boost numbers In 2026. “We need to feed the plant as much as possible,” Messina said. Working closer to capacity does lower the cost per car but still leaves a shortfall with Chinese makers, who are working to completely different financial metrics. “The market there [in China] is stagnant, and probably for most of the Chinese OEMs their operating profit margin is close to negative or break-even,” Messina said. “They need to absorb the capacity by moving vehicles in Europe, which will be for them an incremental profit, even at a lower margin.” Messina didn’t want to publicly call for greater protection in terms of tariffs, but Nissan clearly has an ally in the British government in its battle to compete with the Chinese at a much higher cost base. “The UK is a challenging place to manufacture cars and be competitive,” said Alan Johnson, Nissan’s head of manufacturing for Europe and the wider AMIEO (Africa, Middle East, India, Europe and Oceania) region. As well as injecting funds reportedly amounting to multiple millions (no precise figure has been communicated) to support Nissan’s EV36Zero plan to transform Sunderland into an efficient manufacturer of EVs, the government has engineered its Electric Car Grant to ensure the Leaf qualifies for the full £3750 incentive. That brings the starting price of the Leaf with the largest 75kWh battery down to £32,249, undercutting or matching shorter-range Chinese electric SUVs like the MG S6 EV, Geely EX5 and BYD Atto 3. Messina pointed out that the negative profit numbers in the European results for Nissan has been partly caused by the company’s own investment in Sunderland to prepare for the new EVs, amounting to some £450m, of which £300m has gone directly into the plant. That will hopefully be repaid in future sales, along with manufacturing and design efficiencies. One cost-saving in the Leaf, for example, was deleting the heated windscreen after the company realised that the standard heat pump sped up the demist/defrost process so much that “we couldn't find a difference between them”, Nissan's head of R&D for Europe, David Moss, told Autocar. The arrival of the Leaf will also take the pressure off the bigger Japanese-built Ariya electric SUV to lower Nissan's emissions footprint in Europe; it's likely that sales being forced by discounts are taking the car well below build costs. Also helping will be the new Renault 5-based Micra hatchback and upcoming Wave city car, a reworked Renault Twingo, which will both be built by Nissan's main Alliance partner in France. Nissan is also keen to avoid being talked of as a rival to the Chinese or even other volume makers, said Messina. “I don't want to be arrogant here, but we believe our cars are better. And if I acknowledge that our product is better, then this has to come into pricing and be valued as such.” The promised efficiency of the Leaf could be one selling point to move the price needle. Like many global volume players, Nissan has a ringside seat of China’s cut-throat competitiveness via its joint venture with Dongfeng. In China, the two companies produce the new N7 mid-size electric saloon with Dongfeng technology – a car that Espinosa has said will be exported to global markets. A large SUV with electric and range-extender drivetrains called NX8 is next up. Sunderland could be useful there too. Dongfeng officials have been to visit the plant, according to one source, and Messina didn’t rule out building Dongfeng cars in the UK. “We're going to explore anything which makes sense for Sunderland,” he said.

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Nissan faces 'uncomfortable' pressure from Chinese brands

Nissan's European operations are feeling the heat from the success of new competitors, even with a UK plant

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