Editor's letter: China could save the UK car industry, not kill it
Chery-owned Omoda is among the Chinese brands making waves in the UK
Chinese officials are aware of the opportunity in the UK, comparing it to Japanese investment in the 1980s
The UK's continuation of regulatory alignment with the EU on automotive matters post-Brexit would seem to suggest that the imposition of extra import tariffs on Chinese-made EVs is inevitable, the European bloc having taken that step to protect its industry from cheap imports from China.
However, unlike the EU, the UK no longer has much of a mainstream domestic manufacturing industry to protect, so the ‘threat’ isn’t really one at all.
Retaliatory tariffs from Beijing are set to target large premium cars from the likes of BMW and Mercedes-Benz in one of the few market segments that Chinese brands have yet to get to grips with at home.
Should Westminster follow Brussels in taxing Chinese EVs (new business secretary Jonathan Reynolds has said it has no plans to do so), it should expect the same retaliatory tariffs as a result – which would be bad news for the likes of Bentley, JLR and Rolls-Royce.
The EU’s tariffs can be circumvented by Chinese car makers by opening factories in Europe – which is where an opportunity presents itself to the UK. By not imposing tariffs, the UK’s exports will be protected from retaliatory measures and it will be seen as a far friendlier country with which to do business, opening the possibility of Chinese car makers locating their European factories on these shores, creating new jobs.
This would also ensure that a more affordable supply of EVs could be offered in the UK as part of the government’s own directive that 80% of car sales must be electric by 2030 – much needed, as the market is already lagging well behind on the 22% mandated this year.
More broadly, UK car production needs fresh investment if it ’s to ever grow again. Recent successes have nearly all been about preserving what factories remain, rather than attracting new ones. The Chinese opportunity is the UK’s only realistic chance of growth at volume.
Chinese officials are known to be well aware of this opportunity. They recall how in the 1980s the UK government worked closely with Nissan to secure the Japanese giant’s successful and stillgrowing presence here.
Such a scenario would require a symbolic thawing of attitude to China from the UK, taking us back to David Cameron’s ‘golden era’ of relations, after subsequent governments banned China from being involved in major infrastructure due to security concerns.
On the automotive front, those concerns are about ‘spying’ from Chinese cars – a broad term that if proven would be commercial suicide for any car maker. A Norwegian consortium of cybersecurity experts has been trying to understand this ‘spying’ claim by totally tearing down a Nio EV - so far without cause for alarm.