Investing.com -- Nissan Motor Co. and Chery International UK signed a non-binding memorandum of understanding on Wednesday to explore contract manufacturing arrangements at Nissan's Sunderland facility in the United Kingdom.

The agreement would allow Nissan to produce passenger vehicles for Chery International UK at the Sunderland plant while maintaining full ownership of the facility. All plant employees would remain under Nissan's employment.

The memorandum includes a target to begin manufacturing Chery International UK passenger vehicles on the plant's production Line One during the 2027 financial year.

Last month, Nissan announced plans to consolidate its manufacturing operations onto production Line Two as part of efforts to improve plant utilization.

"This is an important step forward for our operations," said Massimiliano Messina, Chairperson of Nissan AMIEO. "We are looking forward to working with Chery International UK in the coming months to finalise a position that is optimal for both companies."

The memorandum is non-binding and discussions between the two companies continue. No additional details are available at this time.