History Repeating: Chinese Cars Follow Japanese Footsteps into UK Market

A new wave of Asian car makers is changing the British car market, following a pattern that started more than fifty years ago.

In 2025, Chinese car brands took almost 10% of the UK’s new car market, giving industry veterans a strong sense of déjà vu. The quick growth of companies like BYD, MG, and Jaecoo is similar to how Japanese carmakers entered the market in the 1970s, which changed the British car industry for good.

The Japanese Revolution

The first Japanese car to officially arrive in Britain was a Daihatsu Compagno in 1965, which sold only six units. Few expected what would happen next. By the early 1970s, Japanese car makers had become established, and Nissan’s Datsun cars were especially popular with British buyers who wanted reliable cars with low running costs.

The timing worked out well. While Britain’s own car industry faced strikes, quality problems, and old production methods, Japanese cars became a good alternative. Their market share grew from less than 1% in 1970 to over 9% by the early 1980s, helped by the 1973 oil crisis, which made fuel-efficient Japanese cars more attractive.

The British car industry was worried. In August 1973, British Leyland’s Lord Donald Stokes asked for import limits, saying the country was “sitting back like a goose being plucked.” He argued that Japanese companies offered financing at about one-third the cost British buyers paid for local cars, which he saw as unfair competition.

The government responded carefully. By 1976, the Society of Motor Manufacturers and Traders made a voluntary deal to limit Japanese cars to about 10% of the UK market. This “gentlemen’s agreement” lasted until 1999. Still, the change continued. Since they could not increase imports, Japanese companies built factories in Britain. Nissan opened its Sunderland plant in 1986, and Toyota and Honda followed, which changed the UK car industry in a big way.

The Chinese Surge

Jump to 2025, and the similarities are clear. Chinese car brands sold some 200,000 vehicles in the UK last year, taking 9.7% of the new-car market, close to the Japanese share in the early 1980s. They also made up 12.7% of electric vehicle sales, an area where Chinese companies are seen as leaders in technology.

The growth has been very fast. New Chinese brands like BYD, Changan, Chery, Geely, Leapmotor, and XPeng all started selling in the UK in the past three years. BYD grew from fewer than 9,000 sales in 2024 to over 51,000 in 2025. Jaecoo, which had only 209 sales a year ago, sold 28,232 cars in 2025, a huge increase of 13,408%.

MG, now owned by a Chinese company, has become one of Britain’s top ten best-selling brands. The Jaecoo 7, which looks like a Range Rover Velar, sold over 25,000 units, almost as many as all Honda models combined in the UK.

Same Strategy, Different Era

Chinese companies are using a similar strategy to the Japanese: they offer competitive prices with high-spec models, advanced technology, and appealing financing terms. While Japanese brands leveraged the oil crisis with fuel-efficient cars, Chinese brands are making the most of the shift to electric vehicles by selling affordable EVs and plug-in hybrids with the latest battery technology.

The market situation is also similar. The UK does not, on this occasion, have a large car industry to protect, so it is more open to imports than countries like France and Germany, which have higher tariffs. Ironically, Japanese car makers are now losing out, with their market share dropping by almost one percentage point as Chinese brands grow.

The reactions are also much the same. Some industry experts are worried about how quickly Chinese brands are growing and have suggested protective steps. Still, the UK government has stayed mostly open to imports, much like it did in the 1970s, especially when compared to the European Union’s stricter tariffs.

Different Outcomes?

The main question is whether history will fully repeat itself. Japanese car makers became a big part of the British economy by building factories and creating thousands of jobs. It is still unclear if Chinese brands will do the same.

Some Chinese companies are already talking about building factories in the UK, but nothing has happened yet. The rise of electric vehicles could also change things, as making batteries and building charging stations might become more important than traditional car factories.

One thing is clear: British car buyers, just like in the 1970s, are making choices based on value, technology, and reliability, no matter where the cars come from. And this time, UK buyers are much less brand aware than back in the seventies! The UK car market keeps changing in similar ways, with only the brands and technology shifting while the main patterns stay the same.

As one industry veteran said, the British public first saw Japanese cars when “the rather complacent British motor industry” did not realise “just what lay in store.” Fifty years later, established Car Makers and Motor Retailers might be learning that lesson all over again!

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FAQ’s…

How has the entry of Chinese car brands into the UK market mirrored the earlier Japanese invasion?
Chinese car brands in 2025 are following a similar pattern to Japanese carmakers in the 1970s by offering good prices, high specifications, advanced technology, and financing options, which has helped them rapidly grow their market share in the UK.

What historical significance did Japanese car makers have on the British automotive industry?
Japanese car makers dramatically changed the UK automotive industry by providing reliable, fuel-efficient vehicles during a time when the British industry faced issues like strikes and outdated methods, ultimately increasing their market share and establishing manufacturing plants in Britain.

What are the current strategies Chinese car brands are using to succeed in the UK market?
Chinese brands are employing strategies similar to the Japanese past, including offering competitive prices, high-tech features, appealing financing options, and focusing on electric vehicles, which leverage the shift toward electric mobility.

How has the UK’s automotive import policy impacted the growth of Chinese and Japanese car brands?
The UK has largely maintained an open import policy, similar to the 1970s, allowing Chinese and Japanese brands to enter freely without high tariffs, which has facilitated the rapid growth of Chinese brands while Japanese brands are beginning to lose market share.

What potential future developments could influence Chinese car brands’ impact on the UK automotive industry?
Future developments such as building local factories, especially for electric vehicles and batteries, could mirror Japanese investments and significantly influence the role of Chinese brands in the UK economy, although this remains uncertain at present.