Chinese Car Giant Chery Could Build Cars in the UK
Chinese Car Giant Chery Could Build Cars in the UK
Chinese automotive giant Chery is weighing the option of building cars in the UK, signaling a potential expansion of its European operations. Victor Zhang, Chery's UK head, revealed that it’s "a matter of time" before a final decision is made. As Chery continues its global growth, the company is determined to adopt a localized approach to better serve the European market, including the UK. This consideration follows the launch of Chery’s new international brands, Omoda and Jaecoo, which are already gaining traction in the region.
Founded in 1997, Chery has grown to become one of China’s largest car manufacturers and the country’s biggest vehicle exporter. With aspirations to expand its global footprint, Chery has introduced two new brands—Omoda and Jaecoo—dedicated entirely to the international market.
In July, Chery officially launched the Omoda 5, an SUV available in both electric and petrol-powered versions, in the UK. The company has already established 60 dealerships across the country, with plans to surpass 100 by year’s end. This move reflects the brand's confidence in the British market as a key part of its expansion strategy.
Chery is not the only Chinese automaker with eyes on the UK. BYD, one of the world’s leading electric vehicle (EV) manufacturers, and SAIC, which owns the British MG brand, have also entered the UK market with their own models. However, Chery’s potential move to establish production in the UK could mark a new phase in its European localization efforts.
Currently, Chery’s cars sold in Europe are manufactured at its main facility in Wuhu, Eastern China. However, the company has already begun expanding its production capabilities within Europe. Chery has struck a deal with Spanish firm EV Motors to build Omoda and Jaecoo models at a former Nissan factory in Barcelona. Despite this commitment, Chery remains open to additional European manufacturing bases, with the UK being a strong candidate.
Victor Zhang stated that establishing a plant in the UK is still under evaluation, but expressed optimism about the prospects: "It’s just a matter of time. If everything is ready, we will do it." The company’s interest in the UK aligns with its goal of adopting a localized production strategy to better meet market needs and avoid potential tariffs.
Chery’s interest in producing cars within Europe also stems from the European Union’s decision to impose steep tariffs on electric vehicle imports from China in July. The EU argued that Chinese car makers had benefited from unfair subsidies, allowing them to sell cars at lower prices, which threatened local manufacturers. By shifting production to Europe, Chery would avoid these tariffs and solidify its long-term presence in the region.
Zhang, however, denied that the company’s decision is driven solely by tariffs. He emphasized that Chery’s commitment to local production is a broader strategy focused on sustainability and adaptability to local markets. "We are not trying to use any unfair methods," he stated, underscoring Chery’s focus on offering high-quality products through the best local dealerships.
While financial incentives are part of the equation, Zhang highlighted several factors Chery is considering in making its decision. Beyond government policies and subsidies, the company is evaluating the UK market’s education system, availability of skilled engineers and factory workers, supply chain logistics, and overall market demand. "For such a big investment project, it’s a combination of factors," Zhang explained.
Chery has also been exploring other European countries as potential manufacturing hubs, including Italy, where discussions with the government have taken place. The final decision will rest on a holistic evaluation of these factors rather than simply choosing the country offering the best financial incentives.
Although Chinese brands currently account for around 5% of the UK’s car market, their influence is growing rapidly. Chery’s affordable pricing and expansion of its dealership network could make it a formidable competitor in the British market. Established automakers have expressed concern over the potential for Chinese brands to quickly gain a larger market share due to their competitive pricing and strategic localization.
Globally, China’s automotive market is immense, with more than 30 million vehicles sold annually. In 2022, China exported over 5 million cars, marking a 64% increase from the previous year. As Chery continues to expand internationally, the UK may become a significant part of the company’s plans to solidify its presence in Europe.
Chery’s potential decision to build cars in the UK reflects the growing trend of Chinese automakers expanding their global operations. With a localized approach to production and a focus on the European market, Chery is positioning itself to become a key player in the UK and beyond. As the company evaluates its options, its commitment to long-term sustainability and adaptability could pave the way for a stronger presence in the British automotive industry.
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