Chinese car brands developing franchise networks most likely to succeed, dealers say

Chinese EV manufacturers adopting a traditional franchise model are being tipped for successful UK market entry, according to the latest dealer survey from Startline Motor Finance.

According to June’s Startline Used Car Tracker, 36% of dealers reckon Xpeng is the Chinese electric vehicle (EV) manufacturer most likely to succeed in the UK followed by Omoda (34%), BYD (31%), Lynk & Co (24%) and Nio (24%).

Other new entrants named by dealers include Jaecoo (19%), GWM ORA (17%), Zeekr (12%) and HiPhi (5%).

Paul Burgess, CEO at Startline Motor Finance, said: “It can seem as though a new Chinese EV entrant to the UK car market is announced every week but our research shows that dealers are starting to build up a picture of which they think are the most credible.

“Xpeng is an interesting result at the top of the table. Although they have just launched in Germany, they are not expected to arrive in the UK later this year, while other brands such as BYD and GWM ORA already have cars on UK roads. However, dealers obviously see some potential there.”

He added that dealer perceptions of these manufacturers might not just be shaped by press coverage and the models they are selling but the fact that some are in the process of creating franchise dealer networks.

“All of the top three in our results are, we believe, adopting a traditional franchise model for their sales and support networks, so at least some dealers in our survey are likely to be actively talking to these manufacturers about their UK strategies.

“What will be interesting over the medium term, of course, is which of these new entrants are able to not just gain a foothold in the UK market but maintain a presence over time. The Financial Times recently forecast that out of 50 companies making electric vehicles in China, only a dozen were expected to survive until the end of the decade. It is a ferociously competitive market.”

The Startline Used Car Tracker is compiled monthly for Startline Motor Finance by APD Global Research and surveyed 301 consumers and 58 dealers in June.