UK car industry giants look to China on May’s visit

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Leading UK car manufacturers are accompanying Prime Minister Theresa May on her current visit to China, as they look to the world’s biggest vehicle market to boost their business prospects, while keeping one eye on Brexit talks.

Sky News reports that Aston Martin will reveal 600 million pounds’ (850 million US dollars) worth of investment deals during May’s visit to Wuhan, Beijing and Shanghai.

The company’s chief executive Andy Palmer is part of a contingent of more than 40 business leaders accompanying the prime minister.

McLaren, famous for its iconic F1 model, will also be looking to boost its profile in China as part of the British business contingent. The manufacturer of some of the world’s most powerful sports cars is looking to double sales in China, with an eleventh showroom set to open in southeastern Chinese city of Xiamen this year, according to Autocar.

Aston Martin looks to China to soften Brexit blow

China’s vehicle market is arguably more important than ever before for UK manufacturers and workers, ahead of Brexit.

The Society of Motor Manufacturers and Traders has warned of a 4.5-billion-pound (6.4 billion US dollars) blow to the industry if the UK cannot negotiate a deal with the European Union, because of tariffs on imported car parts and other costs.

Aston Martin, known for its association with James Bond, has been producing luxury cars since 1913. /VCG Photo‍

Aston Martin has warned a no-deal Brexit could force it to completely halt production. It remains one of the few British car brands to remain under UK ownership, after iconic names like Mini, Rolls Royce and Bentley were sold to companies like BMW and Volkswagen.

China’s Geely took a 51 percent stake in Lotus last year, a move that shows UK brands can still hold considerable sway in China, the world’s biggest car market.

A decline in British vehicle manufacturing in recent decades has forced remaining members of the industry to carve a niche in the luxury car sector, which is increasingly reliant on buyers from China.

Aston Martin has been in China since 2008, and told BBC in 2012 it expected the country to represent up to 25 percent of its global market soon. 2016 sales saw China represent eight percent of market share, but a global recall of faulty cars last year hit the luxury manufacturer’s reputation in the country.

Nevertheless, 2017 saw 5,117 cars delivered, marking 58 percent year-on-year growth that was led by the Chinese market.

China Daily reported last April that angry Chinese car owners protested at Aston Martin’s Shanghai Auto Show booth against the company’s lack of action over apparent gearbox faults. The UK manufacturer’s response to complaints was described as “very cold” by Carson Guo, president of Beijing Martin Trade Co.

A mechanic works on an Aston Martin at a car repair workshop in Beijing, China June 19, 2017. /VCG Photo

Eventually, 1,658 Vantage vehicles were recalled worldwide based on the complaints from China. Palmer told Reuters it was interesting “that it started from China,” before going on to suggest poorly trained dealers in China were failing to reset the vehicles’ clutches after software updates.

Sky News reports that Aston Martin will use May’s visit to China to announce 10 new showrooms in the country and a training program for Chinese engineering graduates. Stronger sales in China will boost the company ahead of a rumored public flotation in the next couple of years.

China could boost McLaren’s rapid rise

McLaren has shown signs of rapid growth in recent years. 147 McLaren vehicles were sold in China in 2017, a number that chief operating officer Jens Ludmann is looking to double in 2018. While a target of 300 vehicles sounds low, each car is made by a small UK-based team to high standards, selling for hundreds of thousands of US dollars.

The McLaren 570S Spider automobile sits on a stand during its unveiling at the Goodwood Festival of Speed in Chichester, UK, on Thursday, June 29, 2017. The model will be imported to China in 2018. /VCG Photo

The last year saw 3,340 McLaren vehicles sold, marking a new record for the company, which continues to sell the majority of its cars in the US.

Part of its strategy in reaching out to China will see McLaren team up with Chinese designers for an exclusive range of 570GT models, with Ludmann saying “China is increasingly important for a company like McLaren as we are set to import new models, expand our retailer network, boost investment and grow sales.”

The COO added that the company would be working with more Chinese partners, to “jointly celebrate British and Chinese culture and talent.”

Other representatives of the UK car and motor industry accompanying May on her visit to China include Tevva Motors, one of the world’s leading electric truck manufacturers, which has launched a joint venture with Chinese logistics and transport giant JAC.

Leading vehicle research company MIRA and Norton Motorcycles – a company with a history going back to 1898, will also be present.

The Duke of Cambridge (left) looks at a Norton motorbike in Birmingham, UK, in 2013. /VCG Photo

Norton signed a “design and license” agreement with Chinese motorcycle manufacturer Zongshen last July, a multi-million US dollar deal that allows the Chongqing-based firm to use Norton-designed engines in its models for the next 20 years.