In a significant development for the UK automotive sector, Chinese state-owned car manufacturer Chery has confirmed it will establish its European headquarters in Liverpool. This strategic move involves creating a major research, engineering, and commercial hub on Merseyside, which could serve as a precursor to a substantial manufacturing agreement with British automotive giant Jaguar Land Rover.
A Strategic European Foothold in Liverpool
The commercial vehicle division of Chery has selected Liverpool as the base for its entire European operations. This decision represents a major investment in the region's automotive capabilities and signals Chery's long-term commitment to the UK market. The new headquarters will encompass critical functions including advanced research, engineering development, and comprehensive commercial activities, forming a cornerstone of the company's European strategy.
Potential Manufacturing Partnership with Jaguar Land Rover
Industry analysts and government sources indicate that high-level discussions have been underway regarding a potential deal for Jaguar Land Rover to manufacture Chery's electric vehicles within the United Kingdom. This initiative aligns with the UK government's broader automotive strategy and has been a topic of diplomatic conversation, including during recent high-profile visits to Beijing.
Victor Zhang, Chery's UK director, revealed in June that the company was "actively considering" constructing a manufacturing plant in Britain as part of a deliberate "localisation" strategy. This approach aims to deeply integrate the company into the local economy and supply chain.
Utilising Existing Industrial Capacity
Professor David Bailey, a leading business economics expert at the University of Birmingham, suggests that any manufacturing agreement would likely involve utilising spare production capacity at JLR's existing facility in Halewood, Merseyside. The Halewood plant, which currently manufactures Land Rover models, has experienced significant underutilisation in recent years, making it a plausible candidate for such a partnership.
"They've talked about localisation," Professor Bailey noted. "Potentially there's scope to use the JLR spare capacity. The headquarters announcement is very good news, but I don't believe a manufacturing deal has been finalised yet."
Building a 'British Business'
Gong Yueqiong, General Manager of Chery Commercial Vehicle, emphasised the company's commitment to becoming a localised entity. "We are not just bringing products to the UK – we are building a British business," Gong stated. The company has articulated a clear "In UK, For UK, Be UK" strategy, which focuses on recruiting local talent, collaborating with UK institutions, and tailoring products to meet specific regional demands.
Gong further explained: "Our strategy reflects our belief that true globalisation comes from deep localisation. By recruiting local talent, collaborating with UK institutions, and adapting to local needs, we aim to become a valued contributor to the UK’s automotive industry and economy."
Local and Governmental Reaction
The announcement has been met with enthusiasm by local leadership. Liam Robinson, Leader of Liverpool City Council, welcomed the decision: "Chery Commercial Vehicle's choice of Liverpool for its commercial vehicle European base is a major vote of confidence in our city’s capabilities, our workforce and our long-term vision for clean, inclusive growth."
Discussions regarding the potential JLR manufacturing deal have involved UK Business Secretary Peter Kyle and JLR's new Chief Executive, PB Balaji. While Balaji is understood to be open to beneficial commercial arrangements, sources close to the talks indicate that no concrete agreement has been reached at this stage.
Context Within the UK Automotive Landscape
Chery has already begun to establish its presence in the UK consumer market through its Omoda and Jaecoo brands and is launching its core Chery brand with a marketing campaign featuring former England footballer Peter Crouch. The company's move occurs within a broader Merseyside industrial ecosystem that includes Ford's transmission and electric drive unit production adjacent to JLR, and Stellantis's van manufacturing in Ellesmere Port.
This development comes at a critical time for the UK automotive industry, which is navigating transitions towards electric vehicle production and seeking to bolster its manufacturing output. JLR itself has faced recent operational challenges, including a significant cyber-attack in late 2024 that halted production for several weeks.
Jaguar Land Rover has declined to comment on the ongoing discussions. The establishment of Chery's European headquarters in Liverpool nonetheless marks a pivotal moment, potentially setting the stage for deeper industrial collaboration and investment in the UK's automotive future.
