Nissan subsidiary Jatco has reportedly scrapped plans to produce electric axles in Sunderland, UK. The site would have marked the company’s first production facility in Europe. According to media reports, Jatco pulled back from the project due to weak demand for Nissan electric vehicles in Europe.Image: JATCOAt the beginning of 2025, Japan Automatic Transmission Company (JATCO), which is majority-owned by Nissan, unveiled plans for a components plant in Sunderland in north-east England. From 2026, the facility was set to supply e-drives for Nissan’s nearby vehicle plant. The focus was on 3-in-1 e-axles that combine the electric motor, inverter and transmission for locally built battery-electric vehicles.Nissan has been producing the new Leaf in Sunderland since the end of 2025. The company also plans to build fully electric versions of the Qashqai from 2027 and the Juke at the site.However, the components plant is unlikely to materialise. The business newspaper Nikkei reports that Nissan has halted the e-axle project in the UK, citing sluggish sales of its electric vehicles and a consequent decline in market share. According to Nikkei, this prompted the company to rethink its global production strategy.The JATCO facility was initially planned to be built at a cost of 9 billion yen (approximately 49 million euros) and achieve an annual capacity of 340,000 units. Additionally, 183 jobs were expected to be created locally. However, the project never progressed beyond the planning phase—and likely never will. As the report states, “For the time being, the company is expected to continue supplying the drive units from Japan to the UK.”JATCO itself is headquartered in Fuji and operates production sites in Japan, Mexico, China, and Thailand. The UK plant would have marked JATCO’s first foray into Europe. However, the parent company’s current sales figures seemingly do not justify the investment. Nissan’s 2025 electric vehicle statistics reveal a notable gap caused by the model changeover for the Leaf.The discontinuation of the second-generation model and the delayed introduction of the third generation created a void in Nissan’s lineup. As a result, only 87 Leaf units were newly registered in Europe last year (-99% year-on-year). The brand’s second electric model, the Ariya, also saw lacklustre sales (11,507 units, -44% year-on-year), pushing Nissan’s overall passenger car market share in Europe down to 2.2%.This is one of the factors behind the restructuring programme Nissan introduced in May 2025 under the name ‘Re:Nissan’. The strategy includes a global review of the company’s production footprint, and Nissan has already announced plans to close seven vehicle plants within a year. According to Nikkei, the company is also reviewing its component plants. Nissan expects to finalise concrete measures in this area by spring 2027. In Japan, the carmaker manufactures powertrains in Yokohama and Iwaki, as well as at several subsidiary facilities.In Europe, Nissan is now tackling overcapacity by likely abandoning the JATCO project. The restructuring measures also affect the vehicle plant in Sunderland. Earlier this month, the Japanese carmaker announced plans to likely shut down one of the site’s two production lines in the second half of the year. Nissan does not intend to cut overall production capacity but instead plans to merge two underutilised lines into a single line operating at high capacity. To offset the lost capacity, the remaining line will move to a three-shift model, with no production jobs expected to be cut.It is considered certain that production line 2 will remain operational. In recent years, Nissan has invested nearly half a billion euros in the Sunderland site to prepare it for the production of the current Leaf—series production began in mid-December 2025. As part of this upgrade, production line 2 was modernised for electric vehicles, making it the more advanced of the two lines.While jobs in Sunderland’s production are expected to be secure, this does not apply to all roles across Nissan’s European operations. Earlier this month, the carmaker confirmed that discussions are underway to reduce the European workforce by around ten percent, which currently equates to approximately 900 jobs.asia.nikkei.com (Paywall)