First, some background information on the Chinese Car Market in the UK:
- In March 2026, the Jaecoo 7 was the highest registered new car in the UK market with over 10,000 cars registered.
- In 2019 there were 40 car manufacturers in the UK selling their vehicles. Now in 2026 this will increase to 80, chasing a market that is forecast to be smaller than the 2.3m vehicles registered in 2019.
- Despite there being over 100 manufacturers in China, over 50% of sales are controlled by just four groups: BYD, Geely (Volvo), Chery, and Changan
Essentially the car world is in turmoil which has been created by Chinese car manufacturers undercutting the market. The interesting thing about the Jaecoo 7 is that it is a hybrid and not fully electric. There are reportedly over 100 car manufacturers in China that were established during a long period of state subsidy for the electric car industry. This state support has now been removed and there is a price war in the Chinese car market with under 5% of manufacturers currently making a profit.
This has led to Chinese manufacturers targeting European and South American markets where transaction prices are considerably higher and margins are also considerably higher, reportedly 10 times higher in the UK.
To establish themselves in these markets, they are undercutting established manufacturers on price, many of whom carry much higher labour costs in less efficient factories and have more expensive parts suppliers.
What are the pitfalls?
- Parts and service infrastructure need investigating as coverage from some of the new entrants is sporadic.
- Due to long lead times on parts, some insurers may not cover certain models.
- Analysts expect significant consolidation before 2030 — many smaller brands are unlikely to survive
- There will be casualties as the UK market is not big enough to support the number of manufacturers competing for business. So we would suggest some care in selecting cars from the smaller players.
- Although there are no centrally mandated restrictions on the movement of Chinese manufactured electric vehicles on MOD sites. There are some concerns regarding potential security risks leading to some military personnel being advised to park their EV’s with Chinese parts at least 2 miles away from sensitive sites. If your company does business on MOD properties it is worth asking if cars of Chinese origin are allowed on site.
What are the Benefits?
- The Principal benefit is Cost– Chinese cars do offer exceedingly good value for money and are well built, well specified and offer a variety of power units.
- Reliability seems consistent with the market.
- Brand loyalty is not as big a factor. A recent consumer study commissioned by Cox Automotive revealed brand loyalty is undergoing a clear shift, with over 1 in 3 respondents (36%) saying their preference in manufacturers had changed somewhat in the last six months, with this figure jumping to 52% for those under 34.
In conclusion, do we put Chinese Cars on our Picklist? Whilst we would like to recommend British built cars using parts manufactured in the UK, we think the answer has to be yes!
