Key facts
- Chinese carmakers are increasing pressure on traditional UK manufacturers with lower-cost vehicles.
- Automakers are offering deeper discounts to compete with Chinese imports.
- Chinese brands now represent about 15% of new car registrations in the UK.
- Increased competition from China is cited as a factor in the decline of British vehicle manufacturing.
- The EU has imposed tariffs on Chinese electric vehicles, while Britain has not.
Chinese car manufacturers are significantly increasing pressure on traditional UK automakers by offering competitively priced electric and plug-in hybrid models, forcing domestic companies to implement deeper discounts. Mike Hawes, CEO of the Society of Motor Manufacturers and Traders (SMMT), stated that Chinese brands are producing good vehicles at a lower cost, leading to intense competition.
Chinese-owned brands, including SAIC Motor's MG, BYD, and Chery's JAECOO and OMODA, now account for approximately 15% of new car registrations in Britain. Hawes indicated that this heightened competition, alongside trade uncertainty and reduced investment, is contributing to a 7.5% contraction in British vehicle manufacturing during the first half of 2026.
Across Europe, automakers are also grappling with competition from Chinese rivals. Last week, Germany's Volkswagen announced plans to intensify cost-cutting measures. The European Union has already imposed tariffs on Chinese-built electric vehicles due to alleged unfair state subsidies. Britain, however, has not introduced similar measures, and Hawes noted that no complaints from UK manufacturers triggering an investigation into Chinese imports had been made to his knowledge. He also highlighted other pressures on the UK automotive industry, such as high energy costs, weak investment, and regulatory challenges.