In March 2025, a Chinese car unexpectedly topped the UK's bestseller list, with Chery selling 10,064 of its Jaecoo 7 crossover SUVs. This marked a significant milestone for Chinese automakers, who have been aggressively expanding into Europe. The Jaecoo 7, often nicknamed the 'Temu Range Rover,' offers a plug-in hybrid electric vehicle (PHEV) with high-end features at a competitive price, undercutting European rivals.
Cost Advantage and State Support
Chery, a partly state-owned company founded in 1997 in Wuhu, China, has been the largest Chinese car exporter for 23 years. Its cost advantage stems from lower materials and labor costs, with a PHEV Jaecoo 7 costing about $25,000 to produce compared to $33,000 for a comparable European SUV. Labor costs are four times higher in Europe, and materials are 40% more expensive. Additionally, China's government provides extensive subsidies across the supply chain, from toolmakers to AI software, far exceeding European state support.
Quality Improvements and Extras
Chinese cars have shed their reputation for poor quality. Steve Young, managing director of Auto West London, noted that cars at the Beijing auto show were of much higher quality than seven years ago. The Jaecoo 7 comes with heated and ventilated seats, a panoramic sunroof, synthetic leather seats, and a heads-up display—features typically found in more expensive vehicles. Oliver Lowe, head of product at Omoda and Jaecoo UK, said, 'It feels like a steal because you’re getting a PHEV for £35,000, with the specs of a car for £45,000.'
Market Strategy and Tariffs
While US tariffs of 100% under Joe Biden and Donald Trump effectively block Chinese cars from the US, the UK and EU remain open. The UK has not imposed tariffs, hoping Chinese manufacturers will build cars locally. The EU imposed 20.7% tariffs on Chery's electric cars but excluded hybrids, allowing PHEVs to thrive. Almost a fifth of PHEVs sold in western Europe are from Chinese brands, including Chery, BYD, and SAIC. Chery reports that 75% of its UK sales are PHEVs.
Dealer Network and Finance
Jaecoo has expanded to 126 UK dealers, ensuring most customers are within a 40-minute drive. The company offers 0% finance with zero deposit, leveraging its cost advantage. This comes as European manufacturers shift to an agency model, which has frustrated dealers. Lowe explained, 'A lot of other manufacturers have forced the agency model on their dealers. A lot of our new dealers were people who had lost other franchises.'
Future Prospects
Chery executives emphasize being 'in the UK, for the UK,' and may expand manufacturing. The company has already taken over a former Nissan plant in Barcelona and held talks with Nissan to use spare capacity in Sunderland, England. This investment could preserve automotive jobs, but signals that Chinese rivals are here to stay. As oil prices rise due to geopolitical tensions, demand for plug-in cars may further increase, benefiting Chinese manufacturers.
