While its subsidiary Volvo is struggling with overcapacity, and the Ghent factory needs relevance through the production of Chinese models, the Spanish outlet La Tribuna de Automocion reports that the mother company Geely is in talks to buy a part of Ford’s plant in Spain.
Chinese brands are boosting their manufacturing ambitions in Europe to sidestep the European Union tariffs on Chinese-built battery-electric vehicles. BYD picked Hungary and possibly VW’s facility in Dresden, Xpeng outsourced to Magna-Steyr in Austria, while the Chery Group bought Nissan’s former factory in the outskirts of Barcelona, and Leapmotor has a deal with Stellantis for production capacity in Zaragoza.
Finally, MG has announced that it has narrowed its search, considering a site in Ferrol, in northwestern Spain. Indeed, Spain is increasingly becoming the hub for Chinese manufacturing in Europe.
Body 3 assembly hall
These deals are just the beginning. A larger wave of Chinese manufacturing will hit Europe. It is an important evolution that could also future-proof the operations of Belgium’s last car factory: Volvo in Ghent. The brand is fully owned by Geely, which is also venturing into Europe under its own name. It stands to reason that the Chinese group would favor its own infrastructure.
But La Tribuna leaked a different strategy. Apparently, Volvo’s parent company is seeking to invest in Ford’s Valencia plant, which also struggles with overcapacity.
Reportedly, the Chinese group wants to buy the Body 3 assembly hall at Valencia, which would allow the automaker to operate its own separate production line for its Geely brand. This hall is the plant’s most modern assembly area and was designed for Ford’s former midsize platform vehicles: the Mondeo, Galaxy, and S-Max, all of which were discontinued three years ago. Only the Kuga is currently built at the plant.
GEA architecture?
Sources have told La Tribuna that Geely plans to build a model based on its GEA (Global Intelligent Electric Architecture) platform. This architecture can be used for small, compact, midsize, and large cars with battery-electric or plug-in hybrid drivetrains. Possibly, Ford could build an electric model on that architecture on its own.
Aside from Spain’s longstanding diplomatic and political relations with China, the choice of these underpinnings might explain why Geely is not turning to Ghent, which relies on the SEA-E platform found under the EX30.
Production in Valencia would not rule out Chinese models made in Ghent altogether, depending on how many models Geely intends to manufacture in Europe. While with Zeekr, Polestar, and Lynk & Co, among others, the car maker has multiple brands to match European markets.
But if La Tribuna’s sources are correct, it demonstrates how the low-wage workforce in Spain, and Pedro Sanchez’s image as the most China-friendly Prime Minister in Europe (he has voted against the import tariffs), are reshaping Europe’s car manufacturing landscape.
However, it extends to Western brands as well. Under the PERTE program, the Volkswagen Group has invested 10 billion euros in converting Seat’s infrastructure to establish an e-mobility hub in Spain.
“Speculation”
Geely did not immediately respond to requests for comment. A Ford spokesperson told Reuters that the reports were “speculation” and declined to comment further. In previous statements, both companies have said they are “continuously in discussions with various partners, but nothing has been finalized.”
Speculation aside, Geely is definitely scouting for production capacity in Europe to avoid the imposed 18.8% tariff on its BEV imports from China. These are added to the bloc’s standard 10% duty.
