51% of dealers think arrival of Chinese EVs will see existing manufacturers fold

More than half (51%) of car dealers think that the arrival of new Chinese electric vehicle (EV) companies in the UK market will force some established manufacturers out of business.

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.

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, CEO at Startline Motor Finance, 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.

“The Chinese also enjoy other advantages such as ready availability of batteries and are entering the UK market as EV-only entities, meaning they will circumvent the proposed ‘EV Mandate’ on sales figures being introduced by the government.

“By contrast, 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. 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.”

The Startline Used Car Tracker is compiled monthly for Startline Motor Finance by APD Global Research. 301 consumers and 55 dealers were questioned for the June Report.