Expect casualties as more Chinese OEMs enter UK market, CCIA delegates told

The surge in the number of Chinese manufacturers entering the UK market will lead to a number of casualties among brands, visitors to Company Car in Action heard.

During the second of the manufacturer panels held at the event, representatives from three major OEMs – Volkswagen, MG and BYD – discussed the current state of the market, and how it may change in the coming years.

This included the growing number of Chinese brands looking to enter the UK market - such as BYD, Jaecoo, Omoda, Leapmotor and Xpeng, while Changan will launch its first car to the UK - the Deepal SO6 – in September – and what effect this will have.

Malcom Fryer, head of European remarketing and UK fleet sales, at BYD Europe, said: “In China alone, there are something like 200 brands and that’s just not sustainable.

“With an average market share of half a percent, that’s clearly not going to work, even in a big market like China.

“In terms of the UK, there will be winners and losers, and there will be casualties. It’s as simple as that.”

Georaint Isaac, head of fleet sales at MG Motor UK, agreed. He said: “I do genuinely think there will be some casualties; potentially, some well-established marques that have been in the UK for a long time might, unfortunately, no longer be in the future.”

As well as those brands already in the UK market, many more have aspirations or plans to join them.

“There will be a lot of entrants into the market, but it is about whether they will have the ability to maintain their competitiveness because it is a highly-competitive market and an established market as well,” added Isaac.

“There’s not room for everyone. I think some will succeed and some will probably not, but it’s exciting to see what is going on.”

The rapid growth of the Chinese brands is also making well-established manufacturers adapt.

Owen Shepherd, head of fleet sales at Volkswagen said: “We need to learn from our experiences in China and look at how we can move our development cycles quickly to match what the guys are doing in China, which is staggering in terms of development speed.

“We need to adapt to that to continue to make sure that we can hold that number one position in the market.”

There are also other ways legacy manufacturers are responding. “For us, it’s about building on what we are viewed as and on the loyalty and heritage that we’ve got,” he added.

“Our CEO said it would be mad to throw away the equity we’ve built up through brands like Golf and GTI, so we could see them making a comeback in the electric era as well.

“In fact, GTI is coming into the electric era from next year, and there’s a lot of talk of what we’re going to do with names in the future.

“We need to continue to build on what has served us well and what we’ve been good at, as well as keeping a close eye on what everyone else is doing.”

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