Chinese cars could be built in UK by Nissan and JLR – but there are risks

Chinese car makers could be on the verge of manufacturing in the UK through deals with JLR and Nissan to use their facilities. But the national Society of Motor Manufacturers and Traders (SMMT) has cautioned that any production must be fully integrated using local suppliers – something the Chinese might find hard to achieve. Chery, which owns Omoda and Jaecoo, is reportedly looking to use spare capacity in JLR’s plants to build cars locally, while Nissan is rumoured to be reorganising a line at its Sunderland facility to build the Nissan-Dongfeng N7 electric saloon. JLR declined to comment, but Nissan’s boss in Europe, Max Messina, has said he will be “very pragmatic” in his efforts to fill Sunderland in response to the Dongfeng question, without clarifying. The UK became a key market for Chinese brands in 2025, as they doubled their share to 9.5%, led by MG, BYD and the Chery brands. In December that year, their share hit 18%. Traditionally, car makers prefer to build locally when volumes hit a certain level. After selling more than 200,000 cars in the UK last year and just over 800,000 across Europe as whole, the big Chinese brands have certainly reached that threshold. With the UK government targeting vehicle production of 1.3 million by 2035, up from a 73-year low of 764,715 last year, the Chinese have been target number one in the effort to attract a new player. “When you’re talking about new entrants, there’s really only one game in town,” SMMT CEO Mike Hawes told Autocar at a recent briefing. The ultimate goal for the government is to persuade a Chinese brand to build a new factory in the UK, but assembling cars in existing facilities could be a good stop-gap. “Using spare capacity at British plants appears less radical than it might once have done,” David Bailey, professor of business economics at the Birmingham Business School, recently wrote in a blog post. “Such moves reflect a pragmatic attempt to manage risk, improve asset use and sustain industrial capability during a period of structural change.” Chery and JLR already have a relationship, thanks to their long-established joint venture in China, as do Dongfeng and Nissan. By building cars in the UK, Chery and Dongfeng could avoid tariffs as well as winning favour with buyers wary of Chinese vehicles. “Local assembly in the UK using established facilities offers a faster and less risky route to market than building a greenfield plant or relying solely on imports,” wrote Bailey. “It could also be politically popular.” But the difficult question for the UK government as it tries to woo Chinese investment is how integrated any contract manufacturing arrangement should be. Aside from Geely’s operations in Sweden with Volvo and its LEVC facility in Coventry, Chinese car assembly so far in Europe involves little more than finishing off cars sent over as kits. This isn't the SMMT’s idea of manufacturing, said Hawes: “You'd want any investment to be full production, not just assembly of CKDs [completely knocked-down kits]. You'd want them to use the UK supply chain where possible.” Chery’s current European assembly operations in Nissan’s old plant in Barcelona for the Spanish market is strictly a screwdriver operation, involving fitting suspension, axles, wheels and drivetrains to Tiggo SUVs that are otherwise imported fully assembled. MG, under current owner SAIC, did the same thing at Longbridge in Birmingham with the MG 6 in the 2010s. Stéphane Séjourné, the European Commission's executive vice-president of industrial strategy, specifically called out Chery's screwdriver process last September, saying it “creates low-quality workplaces and does not add any value to the European industry”. The advantage of moving to full production in the UK, however, is less clear in terms of cost. China’s local supply chain is highly efficient and many car companies are more vertically integrated than their European counterparts. Without moving suppliers, Chinese companies would find it hard to tap into an the existing supply chain without escalating costs that would be already elevated by higher wages and bigger energy bills. Then there’s the brand risk. Nissan is less exposed, given the N7 is already an existing car in China produced in a Dongfeng-Nissan facility and has been well received locally, but Chery and JLR are further apart. The two are collaborating on the new Freelander brand, but local production for the UK would mostly likely be centred on existing models, raising the spectre of the ‘Temu Range Rover’, as the Jaecoo 7 is known on social media, being built alongside the real thing. But those are minor concerns. These early efforts to bring the Chinese on board recall similar moves with the Japanese in the 1970s and 1980s – specifically Honda working with British Leyland on the Triumph Acclaim and later Rover models before building a plant in Swindon, as Nissan and Toyota did in Sunderland and Burnaston. Back then, the Japanese had higher barriers to entry, including a ‘gentleman’s agreement’ to limit their imports to 11% of the UK market. Now the UK is pretty open to the Chinese, imposing only the 10% World Trade Organisation-specified tariff and no additional tariffs on EVs. That both politically favours the UK and acts as a disincentive for Chinese companies to produce here.

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Chinese cars could be built in UK by Nissan and JLR – but there are risks

Makers Chery and Dongfeng eye spare capacity at some of UK's biggest production sites

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Chinese cars could be built in UK by Nissan and JLR – but there are risks

Makers Chery and Dongfeng eye spare capacity at some of UK's biggest production sites

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