Nissan Withdraws UK Powertrain Work from £50m Sunderland Jatco Facility
A major car components factory in Sunderland has been compelled to pursue alternative contracts following Nissan's decision to not localise electric powertrain production at the site. The Jatco UK facility, which is 75% owned by Nissan, now faces a significant shift in its operational plans.
Factory Launch and Initial Investment
The Jatco UK plant was unveiled with considerable fanfare in January 2025 at the International Advanced Manufacturing Park, located adjacent to Nissan's Sunderland operations. The opening coincided with a £50m investment deal involving Jatco, Nissan, and the UK Government, with £12m allocated through the Automotive Transformation Fund.
This 138,840 square foot facility, representing Jatco's fourth overseas operation alongside bases in China, Mexico, and Thailand, was scheduled to begin production this year. Its primary output was focused on a three-in-one powertrain for Nissan, targeting annual production of 340,000 electric powertrains to serve future generations of Nissan electric vehicles.
Change in Production Plans
However, Nissan has confirmed it will no longer localise production of the three-in-one electrified powertrain in the UK. While Nissan was never intended to be Jatco UK's sole client, company executives indicated at the factory's launch last year that 80% of its capacity was earmarked for producing drivetrains for Nissan's fully electric models built nearby.
At the opening, Jatco chief Tomoyoshi Sato explained the firm also aimed to secure contracts with other carmakers such as Volkswagen and BMW, positioning the North East site as a crucial European hub. Jatco is now understood to be examining alternative possibilities and may also be capable of producing other types of powertrains used in Nissan's electric vehicles.
Employment and Regional Impact
The plant was expected to create 183 direct jobs once fully operational, with an additional 400 positions throughout the broader supply chain. A complete recruitment campaign has yet to commence, with only 20 staff currently working at the site. A Nissan spokesperson confirmed there would be no immediate redundancies.
The spokesperson stated: "Under the global RE:Nissan recovery plan, Nissan, together with partners, has conducted a comprehensive review of key initiatives, introducing further measures to ensure a strong recovery. As part of this the decision has been taken not to localise production of 3-in-1 electrified powertrain to the UK. There is no immediate impact to jobs as JATCO are continuing to study global production capacity."
Political and Government Response
North East Mayor Kim McGuinness expressed disappointment that the Jatco manufacturing facility won't proceed as originally planned. She said: "Our successful automotive industry is a huge source of pride in the North East and remains an incredibly important part of our regional economy. I am seeking a meeting with partners on this as soon as possible as well as continuing to call for more Government funding to help support further growth and development of the EV sector."
She added: "However, we remain ambitious with our plans for EV manufacturing. We are already working to support North East businesses through the £50m Supplier Readiness and Transformation Fund, which is now open for applications. We want to ensure that local businesses can transition to seize the full opportunity electric vehicles represent."
A Government spokesperson stated: "While this is a commercial decision, we will continue to support the company and their staff where possible. The UK automotive industry is vital to the North East. That's why through our Modern Industrial Strategy we're delivering nearly £1bn of DRIVE35 capital and RandD funding to strengthen manufacturers and local supply chains in the region."
Broader Context
Last month, Nissan downplayed reports that new European regulations could threaten the long-term viability of its Sunderland plant. The Japanese manufacturer had previously voiced concerns over the EU's "Made in Europe" initiative but indicated that earlier reservations had been partially resolved.
The shift in production plans at the Jatco facility represents a significant development for the North East's automotive sector, which has been positioning itself as a hub for electric vehicle manufacturing. The region now faces the challenge of adapting to changing global production strategies while maintaining its competitive edge in the evolving automotive landscape.
