Chinese car giant Chery considers building cars in the UK

Chinese car manufacturer Chery is exploring the possibility of setting up production in the UK, according to its UK head, Victor Zhang. Speaking to the BBC, Zhang said it was only “a matter of time” before a final decision would be made. The company, already gearing up to manufacture vehicles in Spain, is keen to adopt a “localised” approach for its European expansion.

Chery, founded in 1997, is one of China’s largest car manufacturers and the nation’s biggest exporter of vehicles. The company has ambitious global growth plans, which include launching two international-focused brands, Omoda and Jaecoo.

Last month, Chery officially introduced its Omoda brand to the UK, offering a mainstream SUV, the Omoda 5, in both electric and petrol versions. The company has already established a network of 60 dealerships across the UK, with plans to grow that number to over 100 by year-end.

However, Chery is not the only Chinese automaker eyeing the UK market. BYD, which competes with Tesla for the title of the world’s largest electric vehicle producer, has also opened several dealerships in the UK. Meanwhile, SAIC, which owns the iconic British MG marque, is already well-established in the country.

Chery’s cars for the European market are currently built at its manufacturing headquarters in Wuhu, Eastern China. However, this may soon change. The company has already secured a deal with Spanish firm EV Motors to produce Omoda and Jaecoo models at a former Nissan factory in Barcelona. While the UK remains a potential location for an assembly plant, Chery has yet to make a final decision.

“We are committed to Barcelona,” Zhang stated. “For the UK, we are evaluating all options. If everything aligns, we will move forward.”

A spokesperson for the UK Department for Business expressed optimism about Chery’s potential investment, calling the UK’s auto sector “thriving.” While not speculating on the company’s decision, the government welcomed Chery’s presence in the market.

Chery is also in talks with other countries, including Italy, about establishing production facilities. Zhang emphasized that the final decision would not be solely based on government incentives but would also take into account factors such as market conditions, workforce talent, and logistics.

Pressure on Chinese automakers to set up manufacturing bases in Europe has increased since the European Union imposed hefty tariffs on imports of electric vehicles from China in July. The EU cited “unfair subsidies” as the reason for the tariffs, arguing that Chinese cars were being sold too cheaply, threatening local manufacturers. In response, China accused the EU of protectionism.

By producing vehicles in Europe, Chery would avoid these tariffs. However, Zhang stressed that the company’s commitment to local production was not driven by trade barriers. “We want to be adaptable to the local market, providing the best products through the best dealerships. Localization is the only long-term strategy,” he said. It remains to be seen if the UK will implement similar tariffs on Chinese imports, but Chery’s interest in establishing a manufacturing base there highlights the country’s potential as a hub for electric vehicle production in the coming years.