Currently reading: Luxury SUV dealers unfazed by new Chinese rivals – should they be?

Upmarket brands are confident in fighting off a new crop of Chinese 4x4s. A shock could be coming

Buyers of premium SUVs and off-roaders are set to have more choice than ever as an influx of Chinese models are due to arrive in the UK - and while sellers of established rivals have told Autocar they're not worried about the newcomers' arrival, experts have warned that they should be braced for a sales impact. 

Models including the Denza B5, Yangwang U8, iCaur V27, Haval Tank, 212 T01 and Dongfeng M-Hero are either confirmed or expected to be sold here within the next few years.

Crucially for their rivals, they are related to brands already quickly establishing themselves in the UK and mainland Europe, such as BYD (Denza and Yangwang), Chery (iCaur) and GWM (Haval Tank). 

Indeed, Chinese brands accounted for almost 10% of the UK new car market last year, driven by new entrants Jaecoo and Omoda, both from the Chery stable, suggesting that brand loyalty is currently close to an all-time low in the UK. 

Ahead of these new entrants' arrival, an Autocar reporter spoke to a number of dealers to assess the view of those on the frontlines. The reporter posed as a customer in order to get the most undiluted views possible. 

First, the reporter visited a Mercedes dealership. He asked if models like the Denza B5 and Yangwang U8 would be worth considering as a much cheaper alternative to an equivalent Mercedes model, such as a G-Class or GLS. "They will be well made and well equipped but Mercedes is an internationally recognised brand," said the dealer. "The new Chinese models can't compete with that." 

The reporter also contacted an Ineos dealership and was keen to know how they thought the Grenadier 4x4 might fare against these incoming new Chinese rivals. The Ineos salesman said he was unaware of those mentioned Chinese brands, adding that the Grenadier's only immediate rival was the Land Rover Defender. "It's likely to remain so too," he said. 

As for the Defender whose most obvious rival will be the similarly styled Geely Galaxy Cruiser - a Land Rover salesperson was unfazed. "The new models might threaten the likes of Audi and BMW but Range Rover and especially Defender are a breed apart, with years of heritage behind them," they said. "There's huge brand loyalty. They are prestige brands and that will count for a lot." 

Geely Galaxy Cruiser

However, industry expert Philip Nothard, insight director at Cox Automotive International, warned premium car dealers against such complacency. "The people at Jaecoo and Omoda are shocked at the premium part-exchanges they're getting and which include Land Rover, Mercedes and Audi models," he said. "Their customers can clearly see what value for money Chinese brands offer. 

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"The old certainties that existed before the Covid pandemic are over and brands such as BMW, Mercedes, Audi and Land Rover need to widen their vision. Their competition is now everybody." 

Nothard conceded, however, that the most expensive premium models are safe, at least for now. He said: "It will take a generational shift for premium Chinese brands to unseat the likes of Mercedes' and BMW's most expensive models. However, among tomorrow's buyers with less attachment to these and other brands, it will happen. 

"To protect themselves, brands may decide they no longer need market share and will instead focus on being more aspirational and expensive, as Jaguar is planning to be." 

Tony Whitehorn, a former CEO of Hyundai UK with experience of launching its premium brand Genesis in the UK, said that taking on existing premium brands will be a huge challenge for the new Chinese entrants. 

"It's extremely difficult to crack Mercedes and Land Rover," he said. "The high levels of quality and features that the Chinese promise aren't a priority for customers at the upper-premium level; they're a given. What people want is prestige and the Chinese brands are unlikely to have that for a very long time." 

Whitehorn also questioned the ability of Chinese brands, currently serving the lower and middle model sectors, to persuade customers to buy their more expensive models at much higher price points. 

"BMW, Mercedes and Audi have demonstrated that premium brands can extend their reach downwards but, in my experience, to grow your brand in the opposite direction is very difficult," said Whitehorn. 

He said establishing separate franchises and showrooms would be crucial to the success of the new Chinese premium brands, something a BYD spokesperson told Autocar it plans to do with Denza. 

"When we launched the LS 400 [when I worked for Toyota], initially it was being sold from Toyota showrooms," said Whitehorn, "It didn't work. You need the right sales and customer relationship environment, which has to be clearly separate from the sister brand. Once we did that, Lexus was transformed."

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