NEW Chinese brand Changan, with its all-electric car launch, means it’s likely to be more fleet-focused than retail, according to UK Managing Director Nic Thomas.
Unlike other new entrants, the company is deliberately taking a more measured approach to growth. Speaking to Broker News, Thomas said the aim was not to chase volume for its own sake:
“We want to be in the top 10 manufacturers, but only at the right time. It is not a race to get there. The direction from the top of the house is to build a quality business in the UK for the long term.”
While Thomas didn’t put an exact timeframe on the ‘top 10’ aim, he did hint that it could be achieved in 2027, when Changan has a full complement of 100 retailers and a significantly expanded model range.
Being a top-10 brand would, in the current market, would give Changan a 4.5% market share and put it just ahead of brands such as Vauxhall, Skoda and Toyota, as well as Chinese state-owned MG. It would also put it on track for close to 100,000 registrations a year.
Early emphasis on business sales
Launching under the Deepal sub-brand with an electric rival to the Tesla Model Y called the S07, Thomas acknowledged that initial sales would be skewed toward fleet, including those through brokers, at first.
“Salsac and leasing are going to be hugely important for us, as well as Motability,” he explained.
Over time, the goal is to achieve a balanced 50:50 retail and fleet split, though Thomas accepts that the current UK EV market leans heavily toward fleet.
“Over time, I want to be in line with the market as we grow our market share. So, we’re talking 50-50 directionally.”
Changan will engage with brokers and the rental sector, but Thomas stresses this will be controlled.
“I want to keep everything in a good proportion. We’ve got a best-in-class [forecast] residual value, which we’re really proud of. We need to protect that. And as I say, it’s not a race for volume, it’s a race to build the right business at the right pace.”
That message should reassure leasing providers who are wary of new entrants flooding the market and damaging values.
“We want to work directly with the leasing companies and over time to build up our corporate fleet capability as well. We’re not there today, but we will build that up over time.”
The Changan product plan
The first Changan model for the UK is a well-equipped D-segment electric SUV, priced below £40,000, which just avoids the expensive car tax band. While the Changan Deepal S07 (to give the car its full name) is aimed at the Tesla Model Y, it doesn’t have the range, power or charging speed of the Model Y.
To counter this, Thomas said he would expect the monthly finance to be better than Tesla Model Y.
The S07 will be followed by a C-segment electric SUV called the S05.
Broker News was also shown round Changan’s UK engineering facility in Coventry, which has been operational for 14 years working on engines, gearboxes and motors for the home market.
Alongside the S07 and S05 at the engineering facility, Changan also had a Deepal G318, a range extended electric vehicle (pictured above). The G318 is a more off-road capable C-SUV sold in China, but is rumoured to be being developed for right hand drive markets such as the UK and Australia.
Longer term plans
Alongside Deepal, Changan also has several other sub-brands. There’s Kaicene, which is predominantly an LCV brand (although it recently started producing cars) and Avatr, which is a luxury brand. Pictured above is the Avatr 07.
Thomas said: “Avatr will come in its own right toward the end of next year and stand alone.
“I’m not directly responsible for Avatr, so they’ll make their own name. We’re working with them and seeing how we can support them.”
Chinese ownership – how secure is Changan?
State-owned Changan is clearly very aware of the UK’s political and public perception of China as an entity that can’t necessarily be trusted, particularly with personal data.
To combat this perception, Changan was keen to point out that it was fully compliant with both European and UK data protection laws. It also highlighted in its launch presentation that all vehicle and personal data gathered in the EU and the UK was stored in an Amazon Web Server hosted in Germany. Changan went on to say that none of that data was ever sent to China.
Photo by Markos Tsoukalas on Unsplash.
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Tristan Young is an award winning journalist with more than 25 years’ experience reporting on the automotive industry focussing predominantly on fleet and retail. As a self-confessed petrol-head, Tristan has a weakness for car classifieds. When he’s not writing about the automotive industry, he can usually be found outdoors with a small pack of border collies.
