Vauxhall turns to China’s Leapmotor in bid to keep British motoring affordable

Vauxhall, one of Britain’s oldest and best-loved motoring marques, is to fit Chinese-engineered components in its vehicles for the first time in its 122-year history, in a striking move designed to keep family motoring within reach of cash-strapped UK households.

Parent group Stellantis confirmed at the weekend that electric motors, battery packs and powertrain technology supplied by Hangzhou-based Leapmotor will sit at the heart of the new Vauxhall C-SUV, a mid-sized family vehicle pencilled in for showrooms in 2028. It marks a significant shift for a brand that has built motor cars in Luton since 1905 and whose Ellesmere Port plant remains a totemic part of British manufacturing.

The deal is the clearest signal yet that Europe’s legacy carmakers have concluded they can no longer fight the Chinese on their own. Stellantis, which already owns a €1.5bn (£1.3bn) stake in Leapmotor acquired in 2023, will also throw open the doors of its Spanish plants to its partner, ending an arrangement under which Leapmotor manufactured exclusively on home soil.

Antonio Filosa, chief executive of Stellantis, described the Chinese group as a “trusted peer” and pitched the tie-up as “a true win-win for both of us”. He added that the agreement was “expected to support production and advance localisation in Europe of world-class manufacturing of electric vehicles at affordable prices to meet customers’ real-world needs”.

That nod to “real-world” buyers will not be lost on investors. Earlier this year Stellantis publicly conceded it had taken its eye off the average motorist during an ill-judged dash into electric vehicles, a misstep that prompted a €22bn writedown in February after sales fell well short of forecasts.

The wider picture is bleak for European and American manufacturers. A wave of well-priced, well-equipped Chinese electric models has caught the West flat-footed, and more than one in four EVs now sold in the United Kingdom is built in China, according to the Society of Motor Manufacturers and Traders.

Western carmakers complain that the playing field is anything but level. Research by the Rhodium Group puts the per-car state subsidy enjoyed by Chinese brand BYD at $347 (£257), against just $39 for Volkswagen and nothing at all for Tesla. Faced with that gulf, alliances with Chinese rivals are fast becoming a survival strategy rather than a strategic option. Stellantis, having taken its initial Leapmotor stake in 2023, has since spun out a 51pc-owned joint venture, Leapmotor International, to push Chinese-designed models into Western markets.

Nissan, the Japanese carmaker with deep roots in Sunderland, is also understood to have held exploratory talks with China’s Chery, the group behind the Omoda and Jaecoo nameplates now appearing on British driveways.

For motorists, the hope is cheaper cars. For Whitehall, the picture is rather more complicated. Under British law, every new vehicle must carry an embedded SIM card capable of contacting the emergency services after a crash, relaying location data and allowing the occupants to speak directly to 999 operators. Critics warn that the same technology could, in theory, allow a manufacturer, or a hostile state, to harvest in-car data or even tap into onboard cameras. Chinese marques and their trade bodies have consistently maintained that their vehicles comply fully with British and European privacy rules.

Under the new arrangement, the Vauxhall C-SUV will roll off the lines in Zaragoza in northern Spain, with a sister Leapmotor model produced in Madrid. Vauxhall engineers are expected to take the lead on design, ride and handling, and interior comfort, in an effort to preserve the brand’s British character.

Zhu Jiangming, the founder and chief executive of Leapmotor, struck a confident note. “Our leading-edge technologies, combined with Stellantis’s global reach, deep regional roots and much-loved automotive brands, would make this a uniquely powerful partnership,” he said. “Our joint venture, Leapmotor International, has quickly shown its benefits for both partners and in less than three years has seen us launch our brand on five continents and significantly grow our international reach and reputation.”

Founded in 2015 and shipping its first car in 2019, Leapmotor is a comparative newcomer in an industry measured in centuries. For Vauxhall, which has watched its market share slip as Chinese rivals such as BYD, MG and Omoda eat into the family-car segment, the gamble is plain enough: borrow the technology, keep the badge, and hope British buyers care more about the price on the windscreen than the country code on the components beneath the bonnet.

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Vauxhall turns to China’s Leapmotor in bid to keep British motoring affordable