Chinese giant Chery could build cars in UK

Chery, a prominent automobile manufacturer from China, is considering the possibility of establishing car production facilities in the United Kingdom. Victor Zhang, the head of Chery in the UK, shared with the BBC that a final decision is expected to be made soon. Chery is already in the process of setting up production in Spain and aims to adopt a localized strategy for the European market. Mr. Zhang firmly stated that the company’s exports have not benefited from any unfair government subsidies. Founded in 1997, Chery has grown to become one of the largest car manufacturers in China and is currently the leading exporter of vehicles from the country. The company has ambitious plans for further expansion, which include the introduction of two new brands, Omoda and Jaecoo, that are specifically designed for international markets. Recently, Omoda was officially launched in the UK, where it has begun selling a popular SUV model, the Omoda 5, available in both electric and petrol versions. Chery has established a network of 60 dealerships across the UK and aims to increase this number to over 100 by the end of the year. However, Chery is not the only Chinese car manufacturer eyeing the UK market. BYD, a company that competes with Tesla for the title of the world's largest electric vehicle manufacturer, has also opened numerous dealerships in the UK. Additionally, SAIC has already made a name for itself in the UK by selling cars under the well-known British MG brand. Currently, vehicles sold in Europe are manufactured at Chery’s main production facility located in Wuhu, Eastern China. However, this situation is anticipated to change in the near future. Chery has secured a partnership with a Spanish company, EV Motors, which will enable the production of Omoda and Jaecoo models at a former Nissan factory in Barcelona. The company is also looking to establish additional production bases. Earlier this year, Chery indicated that the UK could be a potential site for a new assembly plant, and this option remains under consideration. Mr. Zhang explained, 'Barcelona is something we are already committed to. For the UK, we are also evaluating. To be honest, we are open to all options and opportunities. So I think it’s just a matter of time. If everything is ready, we will do it. ' A representative from the UK Department for Business described the automotive sector in the UK as 'thriving. ' They added, 'While we cannot speculate on commercial investment decisions, we welcome Chery International's Omoda launch in the UK and would positively view any new investment in the UK. ' However, the UK is not the only country on Chery’s radar. The company has also been in discussions with the Italian government regarding potential production facilities in Italy. Mr. Zhang emphasized that the decision will not solely depend on which country can provide the best incentives. He stated, 'For such a big investment project, it’s a combination of factors. It’s not just government policy or incentives. You also need to look at the market itself; education, because you need good talented people such as engineers and factory workers; there’s also supply chain, logistics. So there will be many factors involved in our final decision. ' The urgency to establish manufacturing bases in Europe has intensified since July when the European Union imposed significant tariffs on electric vehicle imports from China. The EU justified this move by claiming that Chinese car manufacturers were benefiting from 'unfair subsidies' that allowed their vehicles to be sold at lower prices, thereby undermining local manufacturers. In response, China accused the EU of engaging in protectionist practices. By producing vehicles in Europe, Chery would be able to circumvent these tariffs. Nevertheless, Mr. Zhang reiterated that Chery is committed to local production. He stated, 'We are not trying to use any unfair methods. We want to be adaptable to the local market and provide the best products, using the best dealerships. To be localized is the only strategy for the long term. ' The UK has yet to announce whether it will adopt a similar approach regarding tariffs. China's domestic car market is vast, with over 30 million vehicles sold annually. The country also holds a significant share of the global market, exporting approximately 5 million cars last year, marking a 64% increase compared to the previous year. In the UK, Chinese brands currently account for a relatively small percentage of car sales, around 5%. However, established car manufacturers are concerned that this figure could rise rapidly, especially given the competitive pricing offered by Chinese brands.