Crisis in UK car industry as China ‘changes everything’

The UK’s car industry could be facing a major crisis as Chinese electric vehicles are “reshaping the market”. Earlier this week, figures from the Society of Motor Manufacturers and Traders (SMMT) reported the new car market had grown by 3.55% in January. 

The SMMT described the results as a “promising start” as they revealed they are the best sales figures since before the Covid pandemic of 2020. There was some cause for concern, with the SMMT admitting that battery electric cars posted only a “marginal 0.1% rise”, while the sector’s market share slipped below 21%.

However, Stuart Masson, Editorial Director of The Car Expert, suggested that the numbers “tell a very different story” with concerns mounting for UK and European manufacturers. 

Stuart explained: “As usual, much of the focus this month is on EV market share. And again, as usual, that is not the most interesting story in the data, nor is it where the most significant change in the market is taking place.

“What stands out most in this month’s data is the speed at which new Chinese entrants are reshaping the UK market. Combined, BYD UK and Chery Group brands registered nearly 13,000 cars between them, which is more than Volkswagen UK – still the UK’s biggest individual brand.

“The overall market only grew by fewer than 5,000 cars year-on-year, which means that the rest of the market went down, not up, as the figures suggest.

“In fact, if you remove BYD, Chery Group and the other recent Chinese arrivals such as Leapmotor, Changan and Geely, the rest of the market was actually down around 4% compared to the same month last year. What appears to be growth is, in reality, rapid displacement.”

Last year, the SMMT confirmed that the number of vehicles being built in the UK had dropped to a 72-year low. Over the first half of 2025, just 417,000 cars and vans were completed, the lowest figire since 1953.

Chinese cars proved a massive hit in 2025 and have already begun 2026 on the right foot with impressive sales. A staggering 4,850 Jaecoo models were sold in January, up on the 2,863 vehicles leaving forecourts in December 2025. The budget SUV is closing in on Land Rover’s dominance with the UK brand selling 5,299 cars in January.

Chinese brand BYD boasted a staggering 149% year-on-year sales rise, with over 4,000 cars picked up by customers in January, within demand for Omoda cars also up 211%.

Meanwhile, manufacturers with bases in the UK struggled in January, with Nissan sales down 16,65% year-on-year, with Vauxhall recording a modest 1.89% rise.

Stuart added: “The Chery example on its own is particularly telling. Through Omoda, Jaecoo and Chery, the group was effectively the country’s third-biggest seller this month, with a fourth brand, Lepas, set to join the line-up later this year.

“Individually, the Jaecoo 7 outsold more than half of the car brands operating in the UK, despite not existing in the market just 12 months ago.”