When a British politician was trying to convince people to vote to leave the EU, he made an argument I’d never heard before: leaving the EU would make it easier for Chinese car manufacturers to expand in the UK. After spending a week with some of the UK’s most enthusiastic car enthusiasts and looking at the data, it’s clear that the UK has unexpectedly become the most attractive place for China to gain a foothold in the G7.
My aim in going to the Goodwood Festival of Speed this year was to see some amazing cars and watch my heroes climb the hills of the beautiful English countryside at the home of the Duke of Richmond.
I expected several Chinese automakers to be present, and knew that MG, now owned by Shanghai’s SAIC Motor, would be a featured brand. What I didn’t expect was that Goodwood would be the debut venue for Chinese brands, which no longer have to hide in the shadows of domestic brands quietly owned by foreign companies.
It was surprising, but the more I thought about it the more it made sense: a combination of Britain’s departure from the EU, China’s global ambitions and good timing meant Chinese cars could find a potential market in the UK.
The final, and most important, factor is that the actual British public doesn’t seem to harbor any animosity towards Chinese cars.
BYD threw a party and everyone came together
If you’ve never been to the Goodwood Hill Climb, you probably don’t know how good it is. new Auto shows are no more. With the elimination of the Geneva Motor Show and an overall shrinking of auto shows in Europe, automakers are scrambling to find places to show off their cars.
The paddock is filled with vintage F1 cars and the like, but more than half the grounds are taken up by new cars. On one side of the hill, all sorts of supercar manufacturers are vying for attention with their incredibly expensive carbon fibre masterpieces, and on the other side are a bunch of mainstream manufacturers like Honda, Ford and BMW.
BMW showed off the new M5 to BMW fans, Ford took the covers off the new Capri, and Audi showed off a three-seater car that had never been made before the war. The biggest crowd of the weekend was new This car was likely intended for the Red Bull RB17 hypercar.
The second busiest place? The BYD stand, where people gathered every hour or so to watch the engine start up of the already-revealed Yangwang U9 electric sports car.
An electric car that can tank turns and bounce around is pretty novel and perfect for luring passersby into your booth. While not exactly a concept car, the U9 still attracted plenty of attention, even when it wasn’t dancing for the crowd.
In fact, every time I walked by, the entire BYD booth was packed with people, full of potential customers checking out the various live vehicles on display: on one side were the Yangwang luxury cars and Denza vans, while on the other side were the BYD Atto 3, the BYD Seal plug-in hybrid, and the adorable BYD Dolphin.
The nearby Honda booth also had a few cars on display, attracting a lot of attention, but when I checked, the number of people around the Honda was about half the number of people around the BYD.
Why? A good contrast is the BYD Atto 3, pictured above. It looks almost identical to the Honda e:NY1, but the Honda has a slightly shorter range and is 10-15% more expensive. Of course, the key point is that both the e:NY1 and the Atto 3 are Chinese-made cars.
I eavesdropped on conversations with UK consumers checking out the different models and no one seemed to mind or mention the fact that it was a Chinese-made/Chinese-owned car; they were mostly interested in the price and excited about the features.
That’s not to say that BYD’s booth didn’t have its eye-catching twists. In addition to the bouncing King Yang, BYD also brought along a jolly little robot to greet people. Perhaps more importantly, with the UEFA European Championship (aka EuroCup) between England and France just around the corner, there was plenty of soccer talk. You can even play a little soccer mini-game (I was taught by a 10-year-old). [Editor’s note: I saw it happen. A 10 year-old kid ran circles around Matt. It was hilarious. -DT]try your hand at foosball or revel in the success of the England team, sponsored of course by BYD.
From Beard Brands to Chinese Brands
MG was also a featured brand at the Festival of Speed, and was able to splash out a lot of money on a “centerpiece” statue at the entrance to the Duke’s house. Showing off the brand’s 100-year history, the installation featured a classic MGB on one side and the new electric Cyborg on the other.
The MG brand is one of Britain’s most important car manufacturers, but also one of its most cursed. For decades, MG was known as a manufacturer of fun, sporty little roadsters. And while most of their cars were great, the company always seemed to have problems.
This all dates back to the late 1960s, when the UK economy was in a tailspin and the government tried to merge as many car manufacturers as possible into one big company called British Leyland. It didn’t go well for MG, as the MG brand received little attention despite being one of the few bright spots for the parent company.
After various restructurings of the company, including a brief ownership acquisition by BMW, a group of Brits approached Chinese carmaker Nanjing Automobile Group to buy the bankrupt brand and produce a rebodied Smart Roadster. The move fell through as Daimler would not transfer the rights. Nanjing ended up buying both MG and Rover, after which Nanjing was sold to Shanghai Automotive, another large Chinese car manufacturer.
It doesn’t really matter: in the 90s and 2000s, almost all British brands were sold off, Jaguar/Land Rover to an Indian company (Tata), Mini/Rolls Royce (BMW) and Bentley (VW) went to German brands, and what was left was taken over by Chinese car makers (Geely/Lotus).
Thus was born Hyundai MG Motor, a wholly owned Chinese company that uses the MG brand to sell cheaper gasoline and electric cars around the world.
Apparently MG was originally a “beard brand” to hide the famous British brand’s Chinese roots, but now most consumers are aware that MG is owned by another company and don’t seem to mind. Check out the interview below:
While checking out the Cybster, I asked one enthusiast (who is also an Autopian reader) directly what he thought of the car and if it bothers him that it’s made in China. His answer was “I don’t really care, yeah, I don’t care.” What he did care about was the price.
SAIC’s use of MG as a “beard brand” was clever and seems to have paid off, but most of the cars on show were not bearded brands. With the exception of Lotus, Volvo, and Polestar (all of which are Geely brands), most of the new Chinese automakers exhibiting stuck to their Chinese brands. From what I could see, all of the Chinese automakers that showed at least one car under a Chinese brand were:
- GWM Ora
- BYD
- Denza
- Yang Wan
- Omoda
- Jek
- Red flag
The show was massive and there were people everywhere so we may have missed a thing or two.
Figures show growth for Chinese automakers
MG has been one of the UK’s fastest-growing brands this year, outperforming much of the market since the pandemic. The Society of Motor Manufacturers and Traders (SMMT) reported that in the first six months of the year, MG sold 44,046 cars, up 11% on last year while the market has only grown 6% so far in 2024.
MG’s total sales exceed those of traditional British brands such as Mini and Land Rover, European brands such as Peugeot and Seat, and even Honda.
The brand that is really interesting to me is Mazda. So far this year, Mazda has sold just 14,083 cars. With these sales numbers, can Mazda continue to survive in the country?
MG is not alone: Chinese car makers BYD and GWM Ora are selling more cars in the UK. Interestingly, established British brand Polestar is one of the UK’s worst performing brands, with sales down 60% year-on-year.
Not all smart brands are doing so poorly. Smart is currently a joint venture between Geely and Daimler, and only sells the China-made Smart #1 and Smart #2. Sales of these new Smart cars are up almost 500% this year.
Brexit has made everything easier
As I said at the beginning of this article, I don’t think Brexit supporters were particularly interested in Chinese cars. Indeed, the promise of Brexit was that the UK would emerge new and re-establish itself as a global economic power. But so far, that hasn’t happened, and the UK is trying to avoid a self-inflicted food crisis.
UK car production was down 3.2% year-on-year to 353,843 units in the year to May. Until 2018, the UK was producing just over 1.5 million cars a year. This year it will be lucky to produce half that amount.
It’s still early to tell and there’s a chance that a number of new car factories will open in the UK, but it seems more likely that the UK continues to give up on its dream of becoming an exporter of mass-produced non-luxury cars, making it an increasingly attractive target for Chinese brands.
Brexit unintentionally made this a lot easier. How? Many European countries have automakers that produce cars locally (Germany, Italy, France, Slovakia). The threat of cheap Chinese cars ruining partially nationalized automakers like Renault and Volkswagen is likely what was behind Europe suddenly raising tariffs on Chinese automakers.
On top of the 10% tariff already imposed on imported cars, Chinese automakers face a wide range of tariffs in Europe depending on a variety of factors, with BYD facing an additional 17.4% tariff, Geely facing 20% and SAIC facing the maximum tariff of more than 38%.
For now, the UK is content with the current 10% tariffs and it is unclear whether the new government will take any action – as the UK is no longer part of the EU it does not have to follow EU tariffs.
Where exactly is this all leading to?
The political aspects of all this are interesting: Britain’s new Labour government wants to phase out internal combustion engine cars by 2030, and Chinese cars would make that much easier. Even if Britain were to impose a small tariff on Chinese EVs, it would be much less likely to ruin the domestic car industry, and the environmental benefits might be worth it to Britain’s new leader.
Ultimately, this may be detrimental to British manufacturing. Higher tariffs have prompted Chinese carmakers to push production to Europe, with BYD’s factory set to be built in Hungary. It’s not yet clear whether Chinese carmakers will try to bring production back to the UK, and whether it would make economic sense for them to do so.
There’s a long way to go before Chinese brands and car makers are fully accepted in the UK, but MG’s success and the rise of BYD show the potential. China is overbuilding its EV car industry and is in desperate need of car exports. Chinese companies have had success in India, Latin America and other markets, but they really want access to wealthier countries.
With America out of the question for now and Europe looking a bit uncertain, the UK is a prime target for Chinese brands. As the Goodwood Festival of Speed showed, Chinese car makers are giving it a go, and unlike the English soccer team, they might just score a few goals.
