Chery Auto Explores UK Manufacturing Plant Amid Tariff Challenges

Chinese automotive manufacturer Chery Auto has announced that it is 'actively considering' the establishment of a manufacturing facility in the United Kingdom. This potential move comes as the company faces increasing tariffs imposed by the UK and European Union on imports, prompting a shift towards a 'localisation' strategy to improve its market presence in the region.

Victor Zhang, Chery's UK Director, made the statement during the annual conference of the Society of Motor Manufacturers and Traders, held in London on June 24, 2025. Zhang noted that the growing appetite for Chinese vehicles in the UK market has led Chery to explore the feasibility of a second factory in Europe. 'If we, as a brand, want to be here, to be committed, to be here, manufacturing is something that we should do,' he stated, underscoring the company's intent to establish a more robust operational footprint in the UK.

Since its entry into the UK market in September 2025, Chery has launched two brands, Omoda and Jaecoo, and has reportedly captured 2% of the UK electric vehicle market. 'The curiosity of British drivers is translating into sales,' Zhang remarked, highlighting a notable demand for their hybrid models, including the Jaecoo 7 Super Hybrid, which boasts a range of 90 miles on drive-generated energy.

Chery’s considerations are part of a broader trend among Chinese automakers seeking to mitigate the impact of tariffs imposed by the Trump administration on imports to the United States. Other companies, such as Geely Auto, which has invested over £3 billion in the British sports car manufacturer Lotus, and EVE Energy, which is negotiating to invest more than £1 billion in a new facility near Coventry, are similarly aligning their strategies to navigate these challenges.

The UK's recent trade agreement with the US, set to reduce tariffs on imports from 27.5% to 10%, presents a potential competitive advantage for UK-based manufacturers over their EU counterparts, who still face a 25% tariff on car imports to the US. However, the UK continues to grapple with a 10% general import tariff and a 25% tariff on steel exports to the US, as stated by Business Secretary Jonathan Reynolds, who is actively working to eliminate these barriers.

Sherard Cowper-Coles, Chair of the China-Britain Business Council, indicated that the UK is intensifying its economic engagement with China, noting that Chinese investors are increasingly looking for opportunities in the UK due to the evolving trade climate. He mentioned that UK national security adviser Jonathan Powell is scheduled to visit China next month in preparation for forthcoming high-level discussions.

In conclusion, Chery Auto's potential UK manufacturing facility represents a significant strategic pivot in response to evolving trade dynamics and tariff pressures. As the company considers its next steps, the implications for the UK automotive industry and international trade relations remain to be seen. The prospects of increased local production could enhance Chery's competitiveness in the UK market while contributing to the broader economic landscape in the automotive sector.