Automotive giant Nissan is reportedly holding talks with Chinese automaker Chery regarding production at its factory in Sunderland, UK. These discussions are seen as part of a strategic effort to utilize facilities more efficiently during a period of low production capacity in Europe. This development, however, also closely concerns Chery's Turkey investment and raises further questions.
Samsun Investment Has Not Reached a Concrete Stage for Two Years
Despite the time that has passed since the initial announcements regarding Chery's plans to produce in Turkey, the investment process in Samsun still lacks clarity. The approximately 1.2 million square meters of land allocated for the company in the new Organized Industrial Zone in Tekkeköy district has reportedly been lying empty for two years.
While the market value of the land allocated for the region is stated to be around 6 billion TL, the planned investment is known to be 1 billion dollars and is expected to create 5,000 jobs. The factory was also announced to have a production capacity of 200,000 vehicles.
On behalf of Chery Turkey, Omoda & Jaecoo Turkey Vice President Emre Özocak recently stated that discussions are ongoing, using the following expressions:
"As a Chinese investor, investing in Turkey is, of course, a very strategic decision. When suitable conditions are met, investments are made in locations designated by the state, in a way that can serve the Turkish society. If investment conditions are met in a suitable location, why not? Let Chery Group produce here, sell in Turkey, sell in the Middle East, and sell in Europe. This is entirely a strategic matter. As Chery Group, since we are a state-owned company, progress is made within the scope of states. These are matters above our level."
Chery's UK Move
According to sources close to the industry, the contacts between Nissan and Chery are focused on increasing the production capacity of the Sunderland factory. The facility is said to be operating at approximately 50 percent capacity, and separate production lines in different buildings at the factory offer flexibility for shared use with other manufacturers.
However, it is stated that the discussions may not result in a definitive agreement, and Nissan is also in contact with various other automotive manufacturers for the same facility.
Furthermore, it was reported that similar contacts are not limited to Chery due to production costs and weak demand in Europe; major manufacturers like Ford, Stellantis, and Volkswagen are also evaluating capacity sharing in their European facilities with Chinese brands such as Geely and BYD.
It is also known that Chery previously acquired Nissan's production facility in South Africa and also added the factory in Barcelona, taken over from the Japanese manufacturer, to its portfolio.
Chery, which also owns the Omoda and Jaecoo brands, stands out among rapidly growing Chinese manufacturers in the UK market. The company's market share in the country reportedly rose to 6 percent in March, compared to around 1 percent a year ago.
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