Chinese carmakers piling pressure on UK rivals, auto industry chief says

A surge of Chinese automotive brands entering the British market is creating intense pressure on established UK manufacturers, compelling them to significantly reduce prices to remain competitive. Mike Hawes, CEO of the Society of Motor Manufacturers and Traders (SMMT), stated that Chinese companies can produce vehicles at a lower cost, forcing traditional automakers into substantial discounting.

"In terms of the volume, they're under extraordinary pressure because the Chinese can produce good vehicles at a cheaper cost," Hawes told reporters. "There's a lot of discounting going on in the market... That's basically to try and compete with a Chinese brand."

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In terms of the volume, they're under extraordinary pressure because the Chinese can produce good vehicles at a cheaper cost.

Chinese-owned brands now hold approximately 15% of the UK's new car registrations, with MG, BYD, JAECOO, and OMODA being prominent players. Hawes linked this heightened competition to a 7.5% decline in British vehicle manufacturing during the first half of 2026. Other contributing factors included trade uncertainty and reduced investment.

European automakers are also grappling with similar challenges. Volkswagen recently announced deeper cost-cutting measures to counter Chinese competition. While the European Union imposed tariffs on Chinese electric vehicles in 2024 due to alleged unfair state subsidies, Britain has not followed suit. Hawes noted that any investigation into Chinese imports would require complaints from UK manufacturers, none of which have been formally lodged to his knowledge. He also highlighted high energy costs, weak investment, and regulatory issues as additional pressures on the UK's automotive sector.

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There's a lot of discounting going on in the market ... That's basically to try and compete with a Chinese brand.