Prof David Bailey at Birmingham Business School asked the question on LinkedIn as to whether the announcement that the Chinese car manufacturer Chery producing cars at Nissan’s Sunderland plant could be one of the most significant developments in the UK car industry in the last 10 years.
Much of the initial reaction has focused on the relationship between Nissan and Chery, but those issues are missing the bigger picture, writes Professor Jim Saker, president of the Institute of the Motor Industry.
This is arguably the moment China’s automotive industry stops simply exporting vehicles to Britain and starts manufacturing them here.
As we all know, twenty years ago Chinese carmakers were largely unknown in Europe, struggling to gain credibility in established markets dominated by manufacturers from Japan, Germany, the United States and the UK.
Today, China is the world’s largest vehicle producer, home to some of the fastest-growing automotive brands and a global leader in electric vehicle technology.
Chery may represent historic moment
If Chery vehicles are produced in Sunderland in meaningful volumes, it would represent a historic milestone: potentially making Chery the first major Chinese manufacturer to build passenger cars in the UK on a large scale.
It has not been made public as to whether this is a kit car operation to circumnavigate tariff charges or whether this is a conventional assembly operation.
Whatever form it takes it makes the development particularly noteworthy as it is a reversal of traditional industry assumptions. The real story is not Nissan helping Chery gain access to the British market.
Instead, it is Chery helping to keep one of Britain’s most important automotive manufacturing facilities fully utilised.
Partnerships will prove critical
In an era of intense global competition, factory utilisation matters. Automotive plants require high production volumes to remain efficient and competitive. Partnerships that help secure future workloads can play a critical role in protecting long-term manufacturing operations.
For workers in Sunderland, and indeed across the wider UK automotive supply chain, the nationality of the badge on the bonnet may be less important than the continued viability of the factory itself.
Manufacturing jobs, supplier contracts and future investment remain the priorities.
China’s active investment in the UK
There is also an important psychological shift taking place. Once Chinese brands establish manufacturing operations in Britain, they begin to move from being perceived as foreign challengers to becoming domestic manufacturers. They shift from being pariahs who are exploiting the UK, to organisations who are actively investing in Britain.
The symbolism is striking. When Nissan established Sunderland in the 1980s followed by Toyota and Honda it represented the globalisation of Japanese car manufacturing and transformed perceptions of Britain’s industrial future.
Four decades later, the same site could become a launchpad for China’s automotive expansion into Europe. It will be interesting to see how keen other Chinese brands will be in investing in the UK as opposed to simply shipping cars into our market.
Author: Professor Jim Saker, president, Institute of the Motor Industry
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