By Professor David Bailey
29th January 2026

Another bite of the Chery?

Turning a Strategic Investment into a UK Automotive Opportunity.

The announcement that Chery Commercial Vehicle (CCV) will establish its first European headquarters in Liverpool is a significant vote of confidence in Britain’s automotive and advanced manufacturing capabilities. At a time when the global vehicle industry is undergoing rapid transformation, CCV’s decision signals that the UK remains an attractive base for innovation, engineering and commercial leadership in electric, autonomous and new-energy vehicles.

The new European headquarters will serve as the central hub for CCV’s regional operations, supporting research, engineering, innovation and commercial development. This is not a narrow sales office, but a strategic presence designed to anchor long-term activity.

It is expected to create high-value jobs across engineering, software development, R&D and operational functions, contributing to the UK’s skilled workforce and strengthening its position in future mobility technologies. Expect several hundred jobs in the first instance and more if the Chery looks at European auto production.

Importantly, CCV has been clear about its intention to expand towards ‘full localisation’ - spanning products, research, engineering, talent and commercial partnerships. This ambition aligns closely with the UK’s own objectives: to secure greater domestic value from inward investment, to rebuild industrial depth, and to ensure the transition to electric and zero-emission vehicles supports high-quality employment and resilient supply chains.

While headquarters investment is of course valuable in its own right in bringing high quality jobs, the bigger prize for the UK lies in how this relationship evolves. The UK already possesses many of the assets needed to support deeper localisation, including engineering capability, a sophisticated supplier base, world-class research institutions and, critically, existing automotive manufacturing capacity that is currently under-utilised.

In this context, there is a clear and pragmatic opportunity to explore UK vehicle production using spare capacity within JLR’s UK manufacturing footprint, as we have highlighted before. As the automotive sector navigates platform transitions, electrification and shifting global demand, parts of the UK’s existing assembly infrastructure are operating well below their potential throughput. This spare capacity represents an opportunity, not a weakness.

In the case of JLR, last years its output was just over 200,000 units. It’s Solihull and Halewood plants could at full capacity make 450-500,000 cars a year. Low capacity utilisation means higher costs.

For CCV, accessing established UK production facilities could provide a faster and lower-risk route to European manufacturing than building entirely new plants. It would allow the company to benefit immediately from a highly skilled workforce, proven quality systems, and deep supplier networks, and all while meeting European regulatory and customer expectations.

For the UK, higher utilisation of existing plants would help protect industrial skills, support supply chains and generate additional economic value from assets that are already in place.

This type of arrangement, whether through contract manufacturing, joint ventures or phased production partnerships, is increasingly common in a global industry facing high capital costs and accelerating technological change. It allows companies to scale sensibly, test markets, and adapt production as demand evolves. For policymakers, it offers a route to industrial growth that is faster, more capital-efficient and more resilient than greenfield investment alone.

Beyond assembly, CCV’s presence in the UK opens the door to wider collaboration across the automotive ecosystem. Opportunities exist in power electronics, battery systems, hydrogen technologies, vehicle software, digital engineering and autonomous systems. By integrating UK suppliers and technology firms into its European operations, CCV can help strengthen domestic capability while building a more competitive and localised supply chain.

Knowledge exchange will be central to this process. CCV is a recognised leader in next-generation vehicles, including EVs. Embedding this expertise within the UK, and combining it with British strengths in engineering, data-driven design and systems integration, has the potential to accelerate innovation across the sector.

This partnership also speaks to a broader strategic question for the UK: how to position itself in the next phase of global automotive competition. As countries across Europe and beyond compete to attract EV investment, the UK can’t compete on wages or energy costs. But what it can offer are functioning industrial ecosystems. Think existing plants, skilled labour, research excellence and international connectivity.

Government at national and regional level has an important role to play in ensuring this investment delivers lasting benefits. That means supporting skills development, facilitating collaboration between industry and research institutions, enabling flexible use of existing manufacturing capacity, and creating policy certainty around zero-emission vehicles and industrial decarbonisation. Done well, this can help translate strategic headquarters investment into tangible industrial outcomes.

If approached strategically, this investment could become more than a (welcome) headquarters announcement. It could be the foundation for a new phase of UK automotive collaboration, and one that links global innovation with domestic production, and turns industrial transition into a welcome economic opportunity.

Professor David Bailey works at the Birmingham Business School and is a Senior Fellow at the UK in a Changing Europe programme.