UK Backs Struggling Nissan with One Billion Pound Loan

The British taxpayer is set to provide critical support to Nissan, the struggling Japanese car manufacturer, with a £1 billion loan guarantee through UK Export Finance (UKEF). This financial backing forms part of a £5.2 billion restructuring plan designed to stabilise the company amidst significant financial challenges. The move is seen as a key effort to protect Nissan’s Sunderland plant, the UK’s largest automotive factory, from potential closure.

UKEF’s involvement safeguards a syndicated loan that is integral to Nissan’s survival strategy. The restructuring plan also includes issuing new debt, rolling over existing borrowings, and selling shares in Renault, Nissan’s French partner. As part of these measures, Nissan intends to close seven of its seventeen global factories, with operations in Japan, South Africa, and Mexico already earmarked for shutdown. Other initiatives include the sale and leaseback of assets, including the company’s headquarters in Yokohama.

Nissan’s financial troubles have been compounded by struggles in major markets such as China and the United States. Heavy losses, coupled with the huge investment required to shift towards zero-emission vehicles, have left the company in a precarious position. It reported a staggering £3.33 billion annual loss in 2024 and has embarked on a worldwide redundancy programme impacting nearly 20,000 jobs, approximately 15 per cent of its workforce.

The Sunderland plant, which manufactures the Qashqai, one of Britain’s top-selling car models, and the trailblazing electric vehicle, the Leaf, has been operating at only half capacity. In 2024, it produced just 284,000 vehicles — a 13 per cent decline from the already low output of 2023. Despite this, the plant remains a cornerstone of Nissan’s UK operations, employing 7,000 people across its factory, engineering facilities in Bedfordshire, and a design centre in London.

The UK government has been proactive in supporting the Sunderland site, previously injecting £150 million into a £1 billion gigafactory project to enable production of electric vehicle batteries. The remaining funding required for the venture attracted private investment, underpinned by a government guarantee of £680 million. This investment is vital to Nissan’s efforts to lead in the electric vehicle market and ensure the plant’s future.

Ivan Espinosa, Nissan’s newly installed chief executive, is navigating a pivotal moment for the company. After the departure of his predecessor, Makoto Uchida, Espinosa has presented an urgent rescue plan to the board, aiming to secure further funding by the end of the month. However, with global trade pressures and internal instability still looming, industry analysts have warned that Nissan could face insolvency within a year unless its turnaround strategy delivers results.