Why are Chinese cars flooding the UK?
We investigate why the British market is so attractive to Chinese brands
Skoda boss Klaus Zellmer has a map on his office wall, where he plots the confirmed R&D or manufacturing operations of Chinese car manufacturers in Europe. There are four pins in Germany, a couple each in the UK, Hungary and Italy, plus markers on Spain and Sweden too.
“How do the Chinese handle tariffs?” he explains. “If tariffs impose a risk and there’s enough sales potential, they just invest into that area. We know China’s ambitions and aspirations don't stop at its borders. Their invested capacities and volumes mean they need to export. They are very keen and aggressively looking into the export potential.”
The Chinese influx of the UK and European car markets is in full flow. In the first half of this year, Chinese market share in Europe topped five per cent – up from two per cent at the beginning of 2023, calculates automotive data and analytics firm JATO. It’s even more pronounced in the UK: from January to September, Chinese manufacturer registrations passed 150,000 cars – just under 10 per cent of the entire pie. Changan, Chery, Geely, Haval, Jaecoo, Leapmotor, Poer and XPeng: eight Chinese car brands have launched in this market since the turn of the year. Why?
As Zellmer says, there’s a huge push factor from China. Car makers there are embroiled in a brutal price war, exacerbated by significant oversupply. There are reportedly more than 100 car manufacturers fighting for their survival, often subsidised by regional authorities that don’t want their champions to fail.
Profits are slumping, incentivising manufacturers to look overseas. With Australia already penetrated and the USA closed by trade war, all sights are set on Europe, the world’s second-biggest market.
Not that this is short-term expediency: China has been preparing for this moment since 2009, when the state identified the industry-changing potential of electric cars, betting that regulatory support could foster the technical expertise, raw materials and supply chain to leapfrog western car makers. The plan was formalised into the ‘Made in China 2025’ industrial strategy, published 10 years ago, and the bet has paid off spectacularly.
Skoda boss Zellmer reckons European technologists filed 200,000 patent applications in 2023, the US 600,000. The Chinese equivalent? An astonishing 1.6 billion. “That helps you understand how strong it is as a society, the drive, the engineering power of China,” says the Czech manufacturer's CEO.
Europe hastily erected higher trade barriers after an enquiry into unfair state support for Chinese car makers. An EV surcharge was added to the existing 10 per cent duty, with each importer facing a different levy relating to their levels of co-operation with the investigation. BYD, for example, faces an extra 17 per cent duty, MG a chunky 48 per cent in total.
The UK has kept its import duty at 10 per cent – intensifying the Chinese rush to crack the world’s seventh largest car market. “Not replicating the EU’s anti-subsidy BEV tariffs makes the UK an attractive, higher-margin market the Chinese are likely to exploit,” says European autos analyst Matthias Schmidt. “Also, there are no genuine domestic volume brands available anymore, which still acts as a moat in France and Germany where consumers are more patriotic.”
Lothar Schupet, the European CEO of Geely’s electric premium brand Zeekr, is already preparing to join the UK goldrush in 2026. His team commissioned market research from 8,000 consumers across multiple European countries and, intriguingly, found that Brits were the most open to Chinese cars. “Some 60 per cent said: ‘I don’t care which country the manufacturer comes from’,” Schupet says. “And five or 10 years ago, they might have had negative sentiment about Chinese brands – now they say China has better technology.”
Not every Chinese brand will succeed: it’s critical to build a retailer network to sell and service the cars, Schmidt reckons. “The Chinese OEMs that stand the best chance of making a success in Europe are the ones that are already here.”
And what does it mean for the European makers? “We just need to be better,” concludes Zellmer.
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