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Half of dealers think Chinese EVs will force traditional brands to fold

Just over half of automotive retailers think new Chinese electric vehicle (EV) brands will force traditional car manufacturers to close due to increased competition.

Startline’s June Used Car Tracker also shows that 31% believe some existing brands are already falling behind and 36% say that the next few years will see them fold thanks to tougher competition.

BYD is already partnering with franchised dealers to create a network of 100 dealerships by 2025. Chey’s Omoda brand is looking to establish 50 dealerships by 2024. Other brands like Nio, Lynk & Co, Xpeng and Aiways are all gearing up for their own UK market launches in the next 12 to 24 months.

The Startline Used Car Tracker is compiled monthly for Startline Motor Finance by APD Global Research. This time, 301 consumers and 55 dealers were questioned.

In terms of who will be affected, dealers say that European car makers will be hit hardest (mentioned by 29%), followed by those from the US (20%) and the Japanese (9%). Only 25% agree that there is room in the market for new and existing manufacturers to co-exist in the market.

Paul Burgess, Startline Motor Finance chief executive, said: “The success of MG over the last couple of years has made quite a deep impression on dealers and there is a long list of other Chinese manufacturers in various states of preparation waiting to follow in their footsteps, with Ora and BYD being the most visible.

“The competitiveness of the forthcoming products appear to range from broadly competent to really very good and, depending on factors such as pricing, brand awareness and customer support, they could make a very real impact on the market.”

Burgess said Chinese brands enjoy other advantages such as availability of batteries. As most Chinese brands are only planning on launching as EV-only, it will mean they will also circumvent the proposed “EV mandate” on sales figures being introduced by the UK government.

Burgess added that existing manufacturers are in varying states of competitiveness.

Some have a product plan and EV manufacturing capacity in place or coming soon that will create a smooth glide path through electrification.

He added: “While others appear to be in a much worse place, carrying too much legacy ICE product, limited visible EV expertise, and having uncertain future production facilities.

“It is presumably these businesses that dealers have in mind when predicting that some car makers will hit serious difficulties.”

  • AM is currently running its own poll on whether the UK’s established car brands defend their position against new EV-focused entrants. Take part in the poll and view the latest results here.

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