China Could Save UK Car Industry, Not Kill It

Chinese Investment in the UK: A Golden Opportunity

As the UK prepares to align its regulations with the EU on automotive matters post-Brexit, concerns arise about the imposition of extra import tariffs on Chinese-made electric vehicles (EVs). However, unlike the EU, the UK does not have a significant domestic manufacturing industry to protect. Therefore, the threat of imposing tariffs on Chinese EVs is not a real concern for the UK.

On the other hand, Beijing plans to retaliate by targeting large premium cars from renowned brands like BMW and Mercedes-Benz. This is one of the few market segments where Chinese brands have yet to establish a strong presence. If the UK follows the EU’s footsteps in taxing Chinese EVs, it can expect similar retaliatory tariffs. This would negatively impact luxury car manufacturers such as Bentley, JLR, and Rolls-Royce.

An Opportunity for the UK: Attracting Chinese Car Manufacturers

While Chinese car makers can bypass the EU’s tariffs by opening factories in Europe, the UK has an opportunity to attract these manufacturers. By refraining from imposing tariffs, the UK can protect its exports from retaliatory measures and position itself as a more business-friendly country. This could potentially lead to Chinese car makers establishing their European factories in the UK, creating new job opportunities.

Furthermore, this would ensure a more affordable supply of EVs in the UK, aligning with the government’s directive to achieve 80% electric car sales by 2030. Currently, the UK market is lagging behind the mandated 22% for this year.

Revitalizing UK Car Production

If the UK wants to see growth in its car production industry, it needs fresh investment. Recent successes have mainly focused on preserving existing factories rather than attracting new ones. The Chinese opportunity presents the UK’s most realistic chance of achieving volume growth.

Chinese officials are well aware of this opportunity and draw parallels to the UK’s collaboration with Nissan in the 1980s, which led to the Japanese automaker’s successful and ongoing presence in the country. However, seizing this opportunity would require a change in the UK’s attitude towards China, reminiscent of the “golden era” of relations during David Cameron’s tenure. Previous security concerns have limited China’s involvement in major infrastructure projects, but in the automotive sector, concerns about spying from Chinese cars have yet to be substantiated.

A Norwegian consortium of cybersecurity experts has thoroughly examined a Nio EV, a Chinese car brand, without finding any alarming evidence of spying. Therefore, it is crucial to approach this opportunity with an open mind and embrace the potential benefits it can bring to the UK car industry.