Business Secretary Jonathan Reynolds is reportedly looking into new tariffs on Chinese cars in order to appease the European Union, according to The Times. The move comes as the EU is set to introduce 'Made in Europe' rules on car production, aimed at curbing Chinese dominance. There are fears that the UK could be impacted by the move, so action has to be taken.
UK's Stance on Chinese Car Imports
The UK is one of the only countries not to currently impose tariffs on Chinese cars, with the US and the EU already doing so. However, making the decision to stand with Europe could come back to bite. The figures alone show that the tide is turning and China is already a serious player now, and not just for the future.
Look at the Jaecoo 7. The SUV-focused Chery offshoot was the most popular car in September (10,814 sales), beating the Tesla Model 3 (9,929 sales). So far this year, Jaecoo is second in the standings (39,474 sales), all coming just over a year and a half on from first entering the UK market.
Chinese Brands Gaining Ground
The Chinese brand is beating out Kia, Nissan, Vauxhall and Volkswagen and is now knocking on the door of the Ford Puma as the best seller (42,926 sales). What did they get right? A luxurious interior at a budget price tag. It really has become the 'Temu Range Rover' at over £30k cheaper.
It's a more affordable way to get a foot into the luxury SUV market. Yes, the handling isn't great, but the sales figures don't lie. People are clearly parting with their cash to get one on their driveway. BYD has also seen a 92% surge in sales this year, with the company delivering 68,405 units and enjoying a 3.93% market share. It's incredible growth.
Reasons Behind Low Prices
There are, of course, questions over how Chinese cars are so cheap. Many will argue it's down to Government subsidies and lower labour costs, but that doesn't paint the whole picture. China has invested in battery technology for years, and many brands are now masters in vertical integration, which is saving money.
China is light-years ahead of Europe on EVs. Why doesn't the UK instead embrace the change? With car running costs continuing to soar, many could be put off driving altogether if they don't consider it affordable. Shouldn't the Prime Minister be actively trying to boost EV sales to meet Labour's own petrol and diesel car ban targets? Cheap upfront costs will reduce the barrier to entry and is the only way it can work. Mr Burnham and Labour need to axe this idea and leave Chinese cars alone to compete on an open market.
