Chinese automotive manufacturer Chery has announced plans to establish a research and development headquarters in Liverpool, marking a significant step in its efforts to deepen its presence in the European market. This move could potentially lead to a collaboration with Jaguar Land Rover (JLR), the UK’s leading automotive manufacturer, to produce electric vehicles for Chery’s Omoda and Jaecoo brands.
Strategic Investment in the UK
Chery, a state-owned enterprise, will centre its European operations in Merseyside, encompassing a range of functions including research, engineering, and commercial activities. The company has previously made inroads into the UK automotive sector with its Omoda and Jaecoo brands, and is now launching its namesake brand through a promotional campaign featuring former England footballer Peter Crouch.
The UK government is reportedly negotiating a significant deal that would allow JLR to manufacture Chery electric vehicles domestically. Such discussions were anticipated to take place during Labour leader Keir Starmer’s recent visit to Beijing, although no formal agreement has been reached as of yet.
Localisation Strategy
Victor Zhang, Chery’s UK director, indicated in June that the company is “actively considering” the establishment of a manufacturing plant in the UK as part of a broader localisation strategy. Gong Yueqiong, the general manager of Chery Commercial Vehicle, emphasised their commitment to building a sustainable British presence, stating, “We are not just bringing products to the UK – we are building a British business.”
Business Secretary Peter Kyle has engaged in talks regarding the possible partnership with JLR’s new chief executive, PB Balaji. While Balaji has shown openness to the idea if it proves beneficial, sources suggest that no definitive agreements have been established.
Capacity Utilisation at JLR
David Bailey, a business economics professor at the University of Birmingham, pointed out that any partnership would likely involve utilising spare capacity at JLR’s Halewood factory, which currently produces smaller Land Rover models. Despite the factory’s production exceeding 200,000 vehicles in 2017, output has significantly decreased, especially following a cyber-attack that halted operations for several weeks last year.
Liam Robinson, the leader of Liverpool City Council, expressed optimism about Chery’s decision to set up its European base in Liverpool, viewing it as a strong endorsement of the city’s workforce and vision for sustainable economic growth. He stated, “Chery Commercial Vehicle’s choice of Liverpool for its commercial vehicle European base is a major vote of confidence in our city’s capabilities.”
Commitment to Green Technology
Gong reiterated Chery’s commitment to localisation by stating their ambition to recruit local talent and collaborate with UK institutions. The company’s strategy, encapsulated in the phrase “In UK, For UK, Be UK,” underscores their belief that genuine globalisation stems from substantial localisation efforts. This approach highlights their confidence in the UK’s talent pool, infrastructure, and dedication to green technology.
JLR has opted not to comment on the developing situation.
Why it Matters
The establishment of Chery’s research and development centre in Liverpool signals a noteworthy shift in the UK automotive landscape, with potential implications for local employment, investment, and technological advancement. As the UK aims to meet ambitious production targets, collaborations with global manufacturers like Chery may be crucial in revitalising the automotive sector, fostering innovation, and advancing the transition towards electric vehicles. This partnership could also enhance the UK’s reputation as a competitive hub for automotive manufacturing in Europe.
