Chinese electric car giant could launch UK production factory soon - 'It's just a matter of time'

Chery's Omoda 5 driving away from Bristol Dock

Chery's Omoda 5 driving away from Bristol Dock celebrating its UK launch

REUTERS
Felix Reeves

By Felix Reeves


Published: 08/09/2024

- 11:48

Chery is set to sell at 100 dealerships before the end of the year

One of China's biggest electric vehicle brands could be looking into opening a manufacturing factory in the UK as it looks to gain a footing in the European market.

Chery sold almost 1.9 million vehicles last year and owns popular brands like Omoda and Jaecoo, as well as having a joint venture with Jaguar and Land Rover to produce vehicles in China.


Based in Wuhu, Anhui, China, the manufacturer is now looking to expand its operations after launching in the UK this year with the Omoda 5 which will sell for £25,000 for the petrol version and £33,000 for the electric car.

Victor Zhang, head of UK operations for Chery, has now said it was "a matter of time" before the company made a final decision on whether it will begin building cars in the UK.

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Chery's Omoda 5 driving away from Bristol Dock

Chery aims to create a foothold in the European market

REUTERS

In April, Chery said it would aim to produce 150,000 vehicles a year by 2029 in its new Barcelona manufacturing plant, calling it one of its main exporting hubs.

The plant, which was shut down by Nissan in 2021, will begin production this year on the new Omoda 5 electric vehicle, adding that this would help Chery establish itself in Europe.

Chery could now be looking at the UK for its next manufacturing base, as this would also help the company avoid any sanctions set out by the European Union on exports out of China.

The Chinese manufacturer already has a network of 60 dealerships and aims to expand to 100 showrooms by the end of the year.

Speaking to the BBC, Zhang said: "Barcelona, this 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."

He added that the decision would be based on a number of factors including Government policy, incentives and the market itself with electric vehicles from consumers.

Revenue for Chery soared 50 per cent year-on-year last year to more than 300 billion yuan or £32.2billion as it looks to compete with other major Chinese manufacturers like BYD.

Chinese brands are able to offer far cheaper cars, especially electric vehicles, across Europe thanks to cheaper manufacturing costs, although this has resulted in sanctions.

The European Union has unveiled tariffs for a handful of brands including Tesla (nine per cent), BYD (17 per cent), Geely (19.3 per cent), SAIC (36.3 per cent), other cooperating companies (21.3 per cent) and all other non-cooperating companies (36.3 per cent).

If Chery and other manufacturers were to invest in factories across Europe and the UK, they would be able to avoid these tariffs, as BYD has done.

The Shenzhen-based brand has signed a £780million deal to begin manufacturing electric vehicles in Turkey, circumnavigating tariffs since they would be exporting from the EU's Customs Union.

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Chery's Barcelona manufacturing plant

Chery has invested in a manufacturing plant in Barcelona, Spain

REUTERS

This will also help BYD avoid Turkey's hefty 40 per cent tariff on vehicles exported from China to Turkey. The United States and Canada have also unveiled major charges for Chinese-made vehicles.

Former Transport Secretary Mark Harper confirmed that he would do all he could to protect British manufacturing interests, including the introduction of tariffs.

A spokesperson for the Department for Business said: "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," the BBC reported.

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