Chery Auto will start selling Omoda and Jaecoo brand cars in Italy in the third quarter, its Italian country manager said, making it the Chinese group's second European market.

By the end of 2025, Chery plans three SUV models each for the Omoda and Jaecoo brands with a mixture of fuel types to serve different parts of Europe.

Chery is one of several Chinese automakers bringing lower-cost, mostly electric, vehicles to Europe.

It began selling cars in Spain earlier this year and will start sales in Britain and Poland before the end of 2024, with other major European markets later, Chery's Italian country manager Allen Jean said during a presentation in Milan.

Trade tensions are running high between China and the European Union, which is investigating whether Chinese EV makers benefit from unfair government subsidies.

Chery is also looking at building an assembly plant in Europe and has held talks with Italy's government about investing in the country, sources have told Reuters, adding that other options for the Chinese carmaker include Spain.

The company plans to start sales in Italy with petrol versions of the Omoda 5 crossover and the larger Jaecoo 7 SUV, followed by a fully-electric Omoda 5 and a plug-in hybrid version of the Jaecoo 7 by the end of 2024.

It did not disclose prices, but the petrol Omoda 5 starts at 29,900 euros ($32,400) in Spain.

Like Chinese rival BYD, Chery will use a network of local established dealers, which Jean said would give it immediate access to an extended sales network and give credibility to its new brands.

"Setting up an efficient after-market service will also be a priority," Jean said, adding that Chery was in talks for dedicated space in 40 Italian dealerships, which should reach around 60 by the end of 2024. ($1 = 0.9228 euros) (Reporting by Giulio Piovaccari; Editing by Alexander Smith)