The influx of Chinese cars: here are the Chinese brands that manufacture in Europe
An increasing number of Chinese brands have decided to assemble their models – primarily electric vehicles, but also hybrids – in Europe for the European market. Spain is home to the largest number of these. Others are, for the time being, on hold.
Chinese car brands are gearing up to produce their flagship models in Europe and circumvent the EU’s import tariffs on electric vehicles – and not just those – made in China. Whilst BYD has opted for a factory in Hungary due to be operational by the end of the year, Xpeng is using Magna Steyr’s facilities in Graz, Austria, for its latest models. However, Spain is home to the most Chinese factories. Geely has chosen Ford’s plant in Valencia to produce the EX2, whilst Leapmotor is using Stellantis’s factories in Madrid and Zaragoza, where it will produce the B03 from 2028. Meanwhile, Chery has set its sights on the former Nissan site in Barcelona, where it is about to start production of the Omoda 5. Among the latest arrivals are SAIC, which pays the highest tariff imposed on Chinese manufacturers – 35.3 per cent, plus 10 per cent on imports – and GWM, which announced at the Tech Day in Milan that it will begin producing its Ora 5 in Bulgaria from January.
Brands on hold
Among those on standby is Dongfeng, which has entered into advanced negotiations with the Italian government and the Stellantis group to produce no fewer than 100,000 cars a year in Italia at the Cassino plant. Meanwhile, following the factory in Hungary, BYD could well add another one in the coming years. Meanwhile, to cope with the expected new influx of Chinese-made vehicles, the EU has recently increased tariffs on Chinese hybrid vehicles, unless Beijing limits their annual exports to 15 per cent. Hence SAIC’s decision to focus on Spain for its first factory on the Old Continent. It will be built in Ferrol, Galicia, with the aim of producing 70,000 units a year by the end of 2028. The production site covers an area of 100,000 square metres and will employ around 2,000 people, not including the wider supply chain. For GWM, however, this is the first of several initiatives already planned.
Not just factories
The agreement between the automotive giant GWM and Bulgarian Automotive Industry for the factory in Bulgaria will ensure a production capacity of 50,000 units of one of the Chinese brand’s flagship models, the Ora 5. Furthermore, the group’s medium- to long-term objective is to establish integrated industrial hubs in Europe for both vehicles and components, which will in turn expand the range of models on offer. From a commercial perspective, meanwhile, in addition to Italia, Spain and the Netherlands, GWM is also preparing to enter France and other European markets. Localisation, as GWM suggests, does not mean adapting products to different markets but ensuring they meet the specific requirements of European markets. Production in Bulgaria complements the Research and Development Centre in Munich, which has been operational since 2021 and is also responsible for validating the launch of each model.
China’s advantage
The oversaturation of the car market in China will lead to an increasing search for space in the rest of the world. To offset the saturation of the Chinese market – compounded by fierce price wars – Chinese brands will step up their overseas expansion, with exports set to reach a record 10 million units, up 41 per cent, by the end of 2026. Unlike the North American market, which is protected by tariff barriers and software regulations, Europe will increasingly become a target for Chinese brands, with sales estimated to reach 20 per cent by 2030, up from the current 12 per cent. Chinese competitors now offer models designed for European users, backed by an advantage in terms of price and technology, to which will be added a more extensive presence and a greater number of factories located across the region.
