Chinese giant Chery could build cars in the UK

Chinese car giant Chery is looking into the possibility of building cars in the UK, according to a senior executive.

Its UK head Victor Zhang told the BBC it was “a matter of time” before the company made a final decision.

He said Chery, which is already preparing to build cars in Spain, is determined to take a “local” approach to the European market.

Mr Zhang denied that the company’s exports benefited from unfair subsidies.

Chery, founded in 1997, is one of China’s largest automobile companies. It is currently the best in the country in terms of cars, but it has serious plans to expand.

To help drive that plan forward, it launched two new brands focused entirely on the international market, Omoda and Jaecoo.

Last month, Omoda was officially launched in the UK. It has started selling the mainstream SUV, the Omoda 5, in both electric and petrol variants.

It has built a network of 60 dealerships, and hopes to have more than 100 here by the end of the year.

But it’s far from the only Chinese manufacturer to see the British market as potentially lucrative.

BYD, which has overtaken Tesla as the world’s largest electric car manufacturer, has also opened a number of car dealerships here.

SAIC is already based in the UK, selling cars under the British MG marque.

Cars currently sold in Europe are built at Chery’s HQ production facility in Wuhu, East China. But that situation is expected to change.

The company already has an agreement with Spanish company EV Motors, which will allow Omoda and Jaecoo models to be built at Nissan’s former factory in Barcelona. But it wants to establish other foundations as well.

Earlier this year, the company said the UK could be a candidate for the merger industry. That option remains on the table.

“Barcelona, ​​this is something we are already committed to”, explained Mr Zhang

“In the UK, we are also testing. To be honest, we are open to all options and possibilities.

“So I think it’s just a matter of time. When everything is ready, we will do it”.

A spokesman for the Department for Business described the UK car sector as “thriving”.

“While we cannot speculate on commercial investment decisions, we welcome the launch of Chery International’s Omoda in the UK and would look favorably on any new investment in the UK,” they said.

But the UK is not the only country on Chery’s list. It is also talking to the Italian government about setting up a product in Italy, for example.

Mr Zhang denied that the decision would come down to which country could offer the best incentives.

“For such a big investment project, it’s a combination of things”, he said.

“It is not just a government policy or an incentive. You also need to look at the market itself; education, because you need people with good skills such as engineers and factory workers; there is also supply chain, logistics.

“So there will be many factors involved in our final decision”.

Pressure to set up production bases in Europe has increased since July, when the EU imposed higher tariffs, or tariffs, on electric vehicle purchases from China.

This was done, said Brussels, because car manufacturers in China were benefiting from “unfair subsidies” that allowed their cars to be sold abroad at a lower price, undermining local manufacturers. China accused the EU of protectionism.

By building its products in Europe, Chery will avoid paying those costs. But Mr Zhang stressed that his company remains committed to domestic production.

“We are not trying to use any wrong methods”, he emphasized.

“We want to be familiar with local markets, and provide the best products, using the best dealerships. The construction of the area is the only long-term strategy,” he said.

The UK has yet to say whether it will take a similar approach to its spending.

The domestic car market in China is huge with over 30 million cars sold each year.

Its shares in the world market are also already significant, as approximately five million cars were exported to foreign countries last year. That was a 64% increase over the previous year.

In the UK, Chinese brands still account for a small proportion of car sales, around 5%.

But established carmakers are concerned that the price could rise too quickly, as prices offered by Chinese brands are expected to play a key role.