Few cars manage to earn the name recognition of the Fiesta, Ford’s cheap and reliable runabout that millions of Britons learned to drive in.
But after sales of 4.8 million in the UK alone, the US automaker has discontinued the model. Production is set to wrap this year after nearly 50 years since its debut.
The withdrawal is creating a void at the bottom of the market as more automakers abandon cheaper models in favor of more expensive and more profitable SUVs. Yet nature abhors a vacuum and there are already new manufacturers lining up to replace the old guard. The vast majority come from the same country: China.
According to an industry report seen by The Telegraph, up to 30 new electric vehicle brands are eyeing the UK car market, most of them Chinese.
The challengers have designs on the cheaper end of the market, preparing to sell mass-market battery cars to Britain.
Companies like BYD and Ora, which have already struck deals with UK dealerships, will be joined by a range of other automakers, including Chery, Dongfeng and Haval. These are big brands in China but virtually unknown to UK shoppers.
“My reading of the Chinese is that they are very, very excited about the UK market,” says Mark Raban, boss of Lookers, one of Britain’s leading car dealerships.
Lookers will soon start selling cars from BYD, which is backed by US billionaire investor Warren Buffett. The company only started making cars in 2003, but already has a 17% market share of electric vehicle sales in China.
In addition to the cars themselves, BYD also manufactures the batteries that incorporate them. This will be of increasing importance as growing demand for batteries around the world puts pressure on supply.
“I think we’re going to see very, very competitive pricing,” says Raban.
The Chinese auto market is the largest in the world, but sales growth is slowing, in line with the economy in general. As a result, domestic automakers are now looking to export.
Britain is an obvious target: the UK has recently regained its place as Europe’s second-largest market, behind Germany, and the Chinese car industry already has well-established ties there.
MG, for example, is now one of the fastest growing car brands in the UK, overtaking Citroën, Honda, Renault and Skoda. While a British brand, MG has been Chinese-owned since 2005.
As The Telegraph revealed last month, MG plans to further expand electric car sales in the UK, seeing “significant opportunity” in the country.
China’s Geely is also preparing to invest more in the London Electric Vehicle Company, which manufactures electrified black taxis in London and battery-powered vans. Geely hopes to turn the company into a “high-volume” electric vehicle maker, Reuters reported.
Sales of electric vans have already proved popular with customers, according to accounts recently filed by the Warwickshire company.
Promised investments like this raise hopes that China’s push into the car market could help Britain meet its target of producing 2 million cars a year.
To do so, it will need new factories, likely owned by companies that are not yet producing here, according to the industry lobby group.
If China wants to sell here, could it also bring jobs and production lines, making car production affordable in Britain?
Professor David Bailey, an automotive industry expert at the University of Birmingham, is skeptical.
“I think they can go to central Europe, where labor costs are low. You know, what does the UK do to be an attractive place to settle? »
The United States has implemented a tax windfall worth hundreds of billions of dollars that is currently boosting investment in green vehicles and has already attracted startups such as electric van maker Arrival. The EU is considering a similar system.
“We’re stuck between these two very big blocks that are trying very hard to make this happen,” says Bailey.
For Lookers’ Raban, however, the arrival of a wave of affordable Chinese cars is a “phenomenal opportunity” for his company.
The new brands could take 10% of the UK electric vehicle market by 2025 and 18% by 2030, industry researchers estimate.
The fact that others are falling back as they seek to expand plays into the hands of Chinese manufacturers.
Last week it emerged that Ford was to cut 3,200 jobs across Europe as it shifted its focus from cheaper petrol cars to more lucrative electric cars.
Familiar automakers are ditching cheaper models to sell bigger SUV-style engines and more capable cars to make the most of tight parts supplies.
Ford is focusing on models like its £50,000 electric Mustang. It joins brands like BMW and Mercedes who have both been outspoken that cheaper cars aren’t for them anymore.
Not all have ditched the entry-level car: Nissan has increased production of its Qashqai by 16.5pc, helping it to replace the Vauxhall Corsa as Britain’s best-selling car of the year last.
However, Nissan’s Qashqai starts at £26,000, a far cry from the £16,000 a Fiesta could be bought for just before the pandemic.
Starting at the bottom of the market, Chinese automakers are taking inspiration from Nissan’s book. When the Japanese company entered the UK, it first did so under the guise of its mass-market Datsun, which undermined competition. Over time, it moved up the ranks to introduce more expensive, higher spec models.
For companies like Ford, stepping into the crowded and more expensive segment of the market jostled by Chinese brands cutting costs might not end well for them, says automotive industry expert Professor David Bailey at the University of Birmingham.
“There’s no guarantee they’ll survive,” he says. “And these are the ones that switch to electric vehicles, quickly, efficiently, and are able to reduce their costs; they will be the ones who will survive.
Whatever the outcome, the Chinese challengers will soon arrive alongside European, American and Japanese models in the sales lots. And for buyers looking for an affordable everyday vehicle, they may increasingly be the only options.
Ford is focusing on models like its £50,000 electric Mustang. It joins brands like BMW and Mercedes who have both openly stated that cheaper cars are no longer for them, although Ford points out that despite the Fiesta’s sales decline it was still among the top 10 cars of the year. latest and is joined by Puma and Kuga on the bestseller list.