Nissan held talks with China's Chery on building cars at British plant, FT reports

* Nissan's Sunderland plant is currently operating at 50% of capacity, FT ​reports

* Chery has ⁠been seeking to expand production through Nissan-linked sites in ​Spain, South Africa

* Nissan has been on an aggressive cost-cutting drive (Updating with Nissan statement in 4th paragraph)

TOKYO, April 16 (Reuters) - Nissan has held talks with ​China's ‌Chery about building cars at the Japanese automaker's Sunderland plant in Britain as it seeks to boost utilisation at the factory, the Financial Times ⁠reported on Thursday.

Japan's fourth-biggest automaker recently discussed a partnership with Chery to ⁠make use of the Sunderland facility, which is currently ​operating at about 50% capacity, the report said, citing four people with knowledge of the talks.

Nissan has also held discussions with other companies about using the plant, the newspaper said, adding that talks with the Chinese state-owned carmaker may not result ​in a ‌deal.

Reuters could not immediately verify the report. Nissan said it was assessing future opportunities to secure full plant utilisation in Sunderland, but had nothing to announce.

Chery did not respond to requests for comment.

Chery executives said this month the company was seeking to expand car production in Europe through partnerships using existing plants.

Under CEO Ivan Espinosa, Nissan has been cutting ​costs aggressively as it seeks to turn around its business after years of turmoil, announcing plans last year to close seven ‌plants globally and cut about 15% of its global workers.

Nissan employs around 6,000 workers at the Sunderland plant, which has been a cornerstone of its British presence since ‌the 1980s and has produced models like the Qashqai and Juke crossover SUVs.

Nissan shares closed 2.1% higher, lagging a 2.4% rise in the benchmark Nikkei index.

GROWING CHINESE COMPETITION

As part of its push to revitalise its operations, Nissan is also trimming its global ​model lineup as it tries to stave off a threat from growing competition from Chinese electric-vehicle makers, including in Europe.

Nissan has already taken steps ‌to reduce its manufacturing presence outside its core markets. In January, it said it would sell its manufacturing assets in Rosslyn, South Africa, to the local arm of Chery, signalling its willingness to repurpose or exit underperforming facilities as it seeks to ⁠stabilise earnings.

The talks ⁠over its Sunderland plant would reflect a broader push by Chinese automakers to ‌establish a manufacturing footprint in Europe to avoid import duties and shorten supply chains.

Chery has already formed a joint venture with Spain's Ebro to build cars ​at a former Nissan site ​in Barcelona.

Reuters reported this month that Stellantis is in talks with Leapmotor to build ‌an Opel-branded electric SUV in Spain, and in February that Geely and Ford were discussing a partnership that could see Geely use Ford factory space in Europe to produce cars for the region. (Reporting by Shivani Tanna in Bengaluru and Daniel Leussink in Tokyo; Editing by Sonia Cheema, Mrigank Dhaniwala, Jamie Freed and Louise Heavens)

Ford Motor Company

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