Chinese car brands filling new car price gap
Higher new car prices have paved the way for Chinese car brands to enter the UK market, according to Shoreham Vehicle Auctions (SVA).
It has said that price rises since the pandemic as well as an influx of more expensive electric vehicles created a gap in the market between £25,000 and £30,000, which Chinese brands are filling.
In September, three Chinese models were among the top-10 selling models in the UK, while BYD saw sales surge by 880% compared to a year earlier.
Alex Wright, SVA managing director, 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.”
Residual values
He continued: “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.”
