UK new car supply will improve as Chinese brands increase sales

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OEMS will have to decide whether they want to protect their market share and compete with the new Chinese brands that have a very strong proposition and product availability.

UK new car supply should improve over the next 12 months as OEMs respond to the growing number of Chinese brands launching in the UK.

According to Alex Wright, MD of Shoreham Vehicle Auctions, OEMs need to increase production or risk losing valuable sales and market share to the pressure exerted by brands such as MG, with its value-for-money offering of petrol and EV cars in dealer stock or with minimal delay on delivery.

MG reported a 66.8% sales increase in the UK in 2022 to 51,050 cars, more than established brands such as Skoda, Citroen, and Honda and just 1,200 cars behind Peugeot.

Alex also adds that MG is offering buying terms to leasing and rental companies which will further accelerate sales as both sectors continue to struggle to source new cars due to ongoing supply challenges. And it’s not just MG, Alex expects the growing number of Chinese manufacturers to offer similar levels of value and availability.

“OEMS will have to decide whether they want to protect their market share and compete with the new Chinese brands that have a very strong proposition and product availability.

“When supply improves it will reignite new car sales as well as ease the pressure on the used market,” he added.

Wright also cites some used car prices being on par with new cars as another current challenge.

“Currently, consumers have the option of buying a brand new fully warranted new car on competitive finance or a three-to-four-year-old used car for the same price outside the manufacturer’s warranty. It reminds me of when Daewoo launched in the UK and its new prices were more in tune with used cars,” said Alex.

“OEMs have increased new car prices to help get round this anomaly, but due to inflation used prices are likely to remain high for the foreseeable future. The same type of used cars we sold at auction in 2018 for £9,000 are now selling for £18,000 which gives you some idea of how the market has moved in recent years,” he added.