Competitive pricing promises demand for Chinese EV brands at used car auctions

Competitive pricing will help drive demand for emerging Chinese electric vehicle (EV) brands when they reach UK auctions as used cars, according to Aston Barclay.

Although the models of incoming brands Great Wall Motors (GWM) Ora, BYD, Nio and Chery are likely to take time to reach remarketing centres, Aston Barclay believes that MG Motor UK’s success has helped to highlight the potential of Chinese EV brands to consumers and stock-hungry car retailers.

Aston Barclay’s chief revenue officer Mark Hankey said: “Buying a Chinese used car doesn’t seem as though it will be a compromise as the success of brands such as MG in the used market can confirm.

“The lead times for Chinese ICE and EV products are relatively short which suggests if fleets can get hold of the cars, they will add them to their choice lists.

“Fleets will also look forward to offering their drivers new EVs at sub-£30k prices where the majority of EVs have generally retailed at more than £50,000 up until now.”

Currently, many manufacturers have prioritised retail and leasing sales, but Aston Barclay expects the new Chinese brands to build awareness through rental which is what MG has successfully done.

Hankey added: “From a remarketing perspective, we generally don’t predict new models hitting our auction lanes for up to two years after their launch.

“However, if cars get placed with rental suppliers, we might see some of the new Chinese brands reach the nearly new used market during 2024 and early 2025.

“Currently values of MG ICE and EV cars sold through the Aston Barclay halls range average between £11,500-£13,500. If other Chinese brands reach the used market at that level, then demand should be strong.”

Car retailers recently told Startline Motor Finance’s Used Car Tracker that they were concerned they would not be able to secure stocking finance for the new wave of electric vehicles (EVs) from China when they reach the used market.

Startline’s responses indicated that 54% would be concerned about the potential issue, while 16% were apprehensive about the lack of a support network such as dealers or parts, 12% about poor customer brand awareness and 8% about the collapse or withdrawal from the UK of the manufacturer.

Since then, brands from China have outline their ambitious growth plans, with GWM Ora targeting 16 dealerships by the end of 2023 and BYD’s boss indicating a desire to have 100 UK retail sites.

Growing EV supplies have combined with a series of Tesla price cuts to deliver faltering used values in recent months, however.

Cap HPI head of valuation Derren Martin confirmed last week that used EV values have continued to decline, despite appreciation among petrol and diesel equivalents.