Chery Accelerates European Ambitions with Liverpool R&D Hub as JLR Manufacturing Talks Advance
In a significant boost for the UK's automotive sector, Chinese state-owned carmaker Chery has confirmed plans to establish a European research, engineering, and commercial headquarters in Liverpool. The move signals a deepening of Chery's investment in the region as it expands its Omoda and Jaecoo brands across the UK market.
The decision, backed by Liverpool City Council, comes amid parallel and ongoing talks between UK government officials and Jaguar Land Rover (JLR). At the heart of these discussions is a potential landmark deal that would see JLR manufacture Chery-branded electric vehicles at its British plants, including the Halewood facility in Merseyside. While no formal agreement has been reached, Business Secretary Peter Kyle has been actively involved in facilitating discussions with JLR's new CEO, PB Balaji.
"This investment is a testament to Liverpool's resilient automotive cluster and skilled workforce," said Liverpool City Council leader Liam Robinson, who recently met with Chery executives in Shanghai to finalise the plans. Victor Zhang, Director of Chery UK, had previously indicated the group's commitment to localisation, stating last June that a UK manufacturing base was under active consideration.
The potential JLR partnership presents a strategic opportunity for both parties. For JLR, manufacturing for a third party could help utilise capacity at Halewood, where production has been volatile—output was severely disrupted in late 2024 by a cyber-attack. For Chery, local production would streamline its European supply chain and potentially mitigate trade tensions. This development follows Chery's recent agreement to acquire Nissan's underperforming plant in South Africa, underscoring its aggressive global expansion strategy.
Industry Reaction:
Michael Thorne, Automotive Analyst at Stratton Consultancy: "This is a pragmatic evolution. Chery gets a European beachhead and R&D talent, while JLR gains a potential new revenue stream. It's a clear example of the industry's shift towards flexible manufacturing alliances in the EV era."
Sarah Chen, VP of Operations at a Liverpool-based parts supplier: "We're thrilled. This secures high-value jobs and reinforces the North West as an innovation hub. The collaboration with JLR, if it happens, could be transformative for the entire local supply chain."
David Finch, former union representative and industry commentator: "Let's not sugarcoat this. It's a stark reminder of our own industry's struggles. We're now discussing a British icon essentially becoming a contract manufacturer for a Chinese state-owned firm. Where was the strategic investment to keep JLR's innovation and production wholly sovereign? This is a short-term fix, not a long-term vision."
Priya Sharma, Economist at the UK Institute for Global Trade: "The geopolitical nuance is critical. This deal, alongside Starmer's recent Beijing visit, suggests the UK is cautiously pursuing deeper economic ties with China in specific sectors, despite broader tensions. The success will hinge on balancing economic benefits with strategic autonomy."