Chinese carmakers intensify pressure on UK rivals, industry warns

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, warned in London on July 30 that Chinese carmakers were piling pressure on British rivals as lower-cost imports force traditional manufacturers to offer deeper discounts. The warning lands at a difficult moment for the UK auto industry, which is already facing weak demand, expensive electrification and a sharp squeeze on margins.

The scale of the shift is showing up in market share. Chinese-branded vehicles now account for about 15% of the UK new car market, a level that underlines how quickly brands from China have moved from niche entrants to a serious competitive force. In June 2025, SMMT-linked figures put Chinese brands at 11.56% of the UK market, suggesting the advance has been rapid and sustained.

That pressure is not coming only from the low end of the market. Chinese manufacturers have been moving quickly on battery technology, software integration and pricing, which lets them challenge established carmakers on both value and feature content. For British brands, that means a narrower lane between premium models, where they must defend reputation and technology, and entry-level cars, where cheaper imports can hit price-sensitive buyers.

The strain is visible in production data. UK half-year vehicle output fell 7.5%, a reminder that domestic manufacturers are absorbing demand weakness even before the full impact of the global EV transition is felt. British carmakers are also carrying the cost of retooling factories, building battery supply chains and competing with Chinese groups that benefit from scale, domestic component networks and lower production costs.

Policy is becoming part of the commercial fight. Britain began a consultation on December 24, 2024 to review rules that force automakers to produce more electric vehicles after industry backlash, a sign that the EV transition has already become politically fraught. If Chinese brands continue gaining share, ministers will face sharper questions over tariffs, investment incentives and subsidies, as well as whether the UK has enough industrial tools to keep its automotive base competitive.

For British manufacturers, the challenge is no longer just selling more cars. It is keeping pace with companies that can bring new EVs to market faster, price them lower and bundle in more technology, while UK factories try to preserve profitability in Europe and beyond.