UK Auto Industry Faces 'Extraordinary Pressure' from Chinese Rivals, SMMT Warns

A wave of lower-cost vehicle imports from Chinese brands is putting UK-based carmakers under "extraordinary pressure," forcing them into a market-wide discounting strategy to remain competitive, the head of Britain's main automotive industry body said Thursday.

Mike Hawes, CEO of the Society of Motor Manufacturers and Traders (SMMT), told reporters that the influx of competitively priced electric and plug-in hybrid models has intensified competition for established manufacturers.

Deepening Discounts and Market Share

The primary challenge stems from the ability of Chinese firms to produce quality vehicles at a lower cost, directly impacting pricing in the UK market. "There’s a lot of discounting going on in the market... That’s basically to try and compete with a Chinese brand," Hawes stated during a briefing.

This competitive pressure is reflected in sales data from the SMMT, which shows that Chinese-owned brands now account for approximately 15% of all new car registrations in the UK. Key players driving this growth include SAIC Motor’s MG, BYD, and Chery’s JAECOO and OMODA brands.

Broader Industry Headwinds

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The increased competition is one of several factors weighing on the UK's automotive sector. Hawes noted that it contributed to a 7.5% contraction in British vehicle manufacturing during the first half of 2026. Other significant headwinds cited by the SMMT include high energy costs, persistent trade uncertainty, and weaker investment in the sector.

This trend is not unique to the UK. Across Europe, legacy automakers are grappling with the same challenge. Last week, Germany's Volkswagen announced it would deepen cost-cutting measures specifically to better compete with the growing presence of Chinese brands.

UK Stance on Tariffs

While the European Union imposed tariffs on Chinese-built electric vehicles in 2024, citing unfair state subsidies, the UK has not implemented similar measures since leaving the bloc. Hawes clarified that any potential UK investigation into Chinese imports would need to be initiated by complaints from domestic manufacturers.

He added that, to his knowledge, no such complaints have been formally made. This leaves the UK market open to competition while the industry navigates a complex environment of economic and regulatory pressures.