The increase on new car prices in line with greater investment in EVs following the Covid pandemic has helped new Chinese OEMs enter the UK market for the first time, says Shoreham Vehicle Auctions (SVA).
Prices rose by several thousand pounds which left a price gap of between £25,000-£35,000. This price gap is being filled with high spec high value Chinese new cars.
Alex Wright, SVA’s MD, said: “In my 35 years of new manufacturers entering the UK this is the most positive reaction from the market I’ve seen. Most of the dealer networks we work with have taken on Chinese brands and are positive about their futures.
“Their launch into the UK has coincided with many dealer groups looking for new franchises as OEMs look to streamline their networks.”
Generally, it takes between eight and nine years to establish a new brand in the UK used market.
Wright added: “The challenge for the Chinese newcomers is to establish strong residual values to support the competitiveness of their monthly finance rentals. Early signs are that residual values are strong just as a number of ex-rental cars are set to enter the used market.
“If the manufacturers collaborate with their dealers to shift these ex-rental cars into the retail market at sensible prices it will further support their quest to establish strong residuals. The market should welcome these cars due to its overall shortage of stock.
“Overall, the only challenge for the Chinese is if politics works its way into the automotive industry like it did with Tesla which affected sales and brand equity with consumers.”
