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Chinese car brand prepares first major entry into UK market

BYD car - Visual China Group/Getty Images
BYD car - Visual China Group/Getty Images

A Chinese car brand is seeking to sell large numbers of vehicles in Britain for the first time after a leading UK dealer revealed it is in the final stages of a deal with the country's biggest electric auto maker.

Pendragon said it expects to begin selling cars from BYD, which is based in Guangdong Province, before the end of the year.

BYD, which only started making cars in 2003, already has a small presence in the UK, where it works with Alexander Dennis to make electric buses, but it is a top player in its home country, the world’s largest producer of cars. Of the 56m cars made globally last year, more than 21m rolled off production lines in China.

UK car buyers have been buying Chinese products for some time, but with familiar badges such as Volvo, owned by Geely which also owns Britain's Lotus; or MG, owned by state-controlled giant SAIC Motor.

But Chinese executives are understood to have seen a gap in the UK market as European manufacturers vacate its more affordable end.

They have also observed how buyers have been more adventurous in buying a car from a new brand, such as Tesla.

BYD’s move marks the first entry of a Chinese marque in its own right, although more are expected to quickly follow.

Bill Berman, the chief executive of Pendragon, said: “We are excited to be in advanced discussions with electric vehicle manufacturer BYD to be their lead UK launch partner as they enter the market later this year.”

Prices for more modest cars have shot up in recent years. In 2010, models like the Chevrolet Spark and VW Fox offered motorists the chance to own a car for less than £7,000.

But super inflationary price rises mean the cheapest new cars in the UK like the Kia Picanto, Dacia Sandero and Citroen C3, start at about £12,000 and average at £14-15,000. The Vauxhall Corsa, last year’s most popular model, goes for an average price of about £22,000, having had its own 46pc surge in price since 2019, according to data from Auto Trader.

BYD makes about half its revenue from cars with the remainder coming from components for mobile phones, solar panels, rechargeable batteries and other parts. Last year it made about a third of its sales from overseas.

In its 2021 annual report, it complained of “insufficient domestic demand” and observed “blowout growth” in Europe for electric cars. It has a 17pc market share of electric vehicles in China.