Government backs £1bn Nissan lifeline loan amid raised hopes for future of its Sunderland plant

By JESSICA CLARK

Updated: 22:11 BST, 28 May 2025

The Government will back a £1billion loan to Japanese carmaker Nissan as it undergoes a major restructuring.

The struggling auto giant, which operates the UK’s biggest car plant in Sunderland, is planning to close seven factories and cut 20,000 jobs and is looking to raise £5.2billion to keep afloat.

The £1billion is guaranteed by UK Export Finance, an arm of the Treasury, and will be seen as safeguarding workers in Sunderland as Nissan cuts its number of plants from 17 to 10 globally.

Nissan has not said the factory is safe but boss Ivan Espinosa has insisted it will make more electric cars there, amid reported fears that Nissan could be close to running out of cash by the end of March. 

The Government will underwrite a £1billion loan from Nissan’s lenders.

Nissan will also sell part of its stakes in French carmaker Renault and battery firm Aesc Group, and plants in South Africa and Mexico at a crunch time for manufacturers who are reeling from Donald Trump’s trade wars.

Loan deal: Nissan, which operates the UK’s biggest car plant at Sunderland (pictured), is planning to close seven factories and cut 20,000 jobs

Britain’s recent trade deal with the US to reduce tariffs from 25 per cent to 10 per cent for up to 100,000 cars made in the UK has contributed to the UK’s attractiveness as an investment destination.

This week, Toyota, the world’s biggest car manufacturer, said it would expand production in the UK.

Earlier this month, it emerged that Nissan was plotting 11,000 job cuts on top of the 9,000 roles put at risk in November.

It has lost £3.4billion in the last year.

A 73-year low for production

UK vehicle production fell 16 per cent to 59,000 last month, the lowest April level since 1952 – excluding the pandemic in 2020.

Car manufacturing was down 9 per cent partly due to the timing of Easter, and the changeover to new models. 

Exports to the EU were down by 19 per cent and to the US by 3 per cent.

Output of commercial vehicles slumped more than two-thirds after a post-pandemic boom in HGV demand faded, according to Society of Motor Manufacturers and Traders’ figures.

Total production for 2025 is down 8 per cent to 298,000, the worst start for a year since 2009.

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Government backs £1bn Nissan lifeline loan amid raised hopes for future of its Sunderland plant

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