China's auto industry is making waves around the world, and Chery, one of the world's largest carmakers, is looking beyond its borders to expand its presence in Europe. After developing production plans in Spain, Chery is now exploring the potential of manufacturing cars in the UK, which could have a significant impact on both the UK car industry and the wider European market.
Why Chery Eyes Great Britain for manufacturing
Chery's interest in localizing production is part of its broader strategy to avoid high tariffs imposed by the European Union (EU) on imported Chinese electric vehicles (EVs). In July 2024, the EU began imposing high tariffs on imports of Chinese electric vehicles, citing concerns about "unfair subsidies." Because of these tariffs, it becomes more and more expensive for Chinese manufacturers to sell in Europe without local production.
To learn more about Chery's global strategy, read this BBC article.
Great Britain, with its strong engineering talent and developed automotive infrastructure, is an attractive destination for Chery. According to Victor Zhang, head of Chery in Great Britain, the company is seriously considering the possibility of opening production facilities in Britain. Although a final decision has yet to be made, Zhang hinted that it is only a "matter of time."
Localized production: changes for Chery
Chery's push to localize production in the UK isn't just a response to tariffs. The company focuses on regional adaptability to address local markets. With the launch of the Omoda 5 SUV, available in both electric and petrol versions, Chery has already put down roots in the UK, building a network of 60 dealerships, aiming to increase that number to over 100 by the end of the year.
By establishing a physical manufacturing presence, Chery can create a local supply chain, reducing transportation costs and aligning its products with local advantages, which could be critical to long-term success in Europe.
Competition with famous players
Chery's competitors are not sitting idle. BYD, another Chinese car giant, and SAIC (which sells under the classic British MG brand) are already setting up networks in the UK. In addition, well-known brands such as Tesla are constantly innovating to maintain their market share.
Although Chery's share of the UK market is still small, with Chinese brands accounting for just 5% of sales, experts predict this figure will grow rapidly thanks to the competitive pricing and improved performance of Chinese-made electric vehicles. The UK government's stance on tariffs and overall market competitiveness will play a key role in shaping Chery's future here.
What lies ahead?
While Chery has yet to confirm any UK deals, insiders believe it's not a matter of "if" but "when". While Chery continues to explore its options, the UK government has expressed interest in further investment, particularly in the electric vehicle sector, where growth is a priority.
The final decision on whether Chery will build cars in the UK depends on several factors, including logistics, supply chain capabilities and government incentives. Regardless of the outcome, Chery's global ambitions are clear and its focus on the UK signals an exciting chapter in the evolution of the European car market.
Conclusion: the market is on the verge of transformation
Chery's potential entry into the UK could mark the start of a major transformation in the car industry, with Chinese manufacturers playing a more dominant role in shaping the future of electric mobility. As Chery and other companies continue to build their presence, the landscape of European car manufacturing may never be the same.
Take personally:
It's exciting to see how Chery is positioning itself to become a major player in Europe. If they manage to set up a manufacturing base in the UK, it could be a game-changer for the car industry. Personally, I believe this kind of competition will drive innovation and offer consumers more affordable, high-quality EV options.
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