Spain is becoming the bridgehead for the entry of Chinese automobile brands into Europe. The arrival of new brands has multiplied during last 2025 and the first half of this year, currently reaching a total of 34 different firms that, in the figures accumulated until the end of July of this year, have managed to register a total of 110,406 units, which corresponds to about 15% of the total market. And this is without counting some Chinese-owned European brands, such as Volvo, Lynk&Co or Polestar.
A recent study by the Swiss bank UBS argued that, due to the economic crisis that China is suffering, in recent years car sales have fallen significantly and, specifically, last year around five million cars were no longer sold in that country.
The Chinese Government’s instructions to manufacturers were clear: no to closing factories in the country and selling these surpluses to the rest of the world. To this end, it established the necessary aid for entrepreneurs, especially in the field of financing. The consequence of this is the massive arrival of Chinese automotive products, especially to Europe, and in conditions that, for many, do not comply with the rules of the free market in view of the marketing prices of many of the vehicles that are for sale.
The consequences of this aggressive trade policy have not been long in coming and several of the main European manufacturers have begun a process of restructuring their production due to the loss of market share. Volkswagen may be the most serious example, with the announcement of a workforce reduction of around 100,000 jobs, but it is not the only one. BMW and Mercedes are also studying reductions in the workforce, although in more moderate figures. But not even the most exclusive brands are exempt from this situation, since Porsche has also announced the cessation of activity of just over 5,000 jobs.
The policies of the European Union, favoring the sale of cars powered by electric motors, have done nothing more than favor Chinese manufacturers, pioneers in the production of batteries and with the ease that that country has in accessing rare earths and other essential components for the manufacture of this fundamental part of electric cars. And with the aggravating factor of imposing heavy fines, through the CAFE regulations, on manufacturers who do not meet the emission reduction objectives in the vehicles they sell, despite the fact that market demand is not growing at the rate initially planned by the Brussels authorities. Specifically, in Spain the demand for electric-only cars is around one in ten of the registered cars.
Faced with this situation, and despite the little influence that European manufacturers have shown over many years over Brussels decisions, the European Union has imposed tariffs on Chinese cars to favor European production and the creation of new jobs. A measure that has caused some Chinese manufacturers to look for a way to try to overcome this barrier that significantly increases their final price. The simplest is to reach agreements with European manufacturers to use their underused industrial facilities and assemble almost entirely Chinese-made cars there. In European facilities, the most common elements are final assembled and, in this way, tariffs are avoided as they are cars that come from European assembly lines. This is a strategy to haggle and somehow avoid this additional fee.
It is true that this is not always the case. This is not the case, for example, of the Leap that will be manufactured in the factory that the Stellantis group has in the Zaragoza town of Figueruelas, where other models from the group’s brands, such as Opel or Lancia, are already manufactured. Or in the agreement recently signed by Geely, by which the Chinese firm pays Ford 221 million euros in exchange for 34% of the facilities to produce up to one hundred thousand cars at the current Ford factory in Almusafes, in Valencia. But it has not been specified which models and what percentage of parts and other components will arrive from China and how many will be produced in Spain. There are other operations, such as Chery’s in the Barcelona Free Trade Zone, which is using the old Nissan facilities to assemble the Ebros, which come entirely from China. A case similar to what is being prepared in Linares to manufacture various models of Chinese “pick-up” in the old Santana facilities.
The latest case that has come to the media, although it has been known for months, is the project of the Saic group, owner, among others, of the MG brand, and which proposes to build a car factory in Ferrol, which would create more than 2,000 jobs and which would build 120,000 vehicles a year. But it should be noted that the budget that has been managed at the moment is 200 million euros. An insufficient amount to be able to build on the former Amper land, with a surface area of 70,000 square meters, a facility that produces automobiles entirely as they are made, for example, in the nearby Stellantis factory in Vigo. The works will begin in 2027 and it will begin to be operational before the end of 2028. It has been speculated that this project hides other purposes related to the naval base that Spain has in that same port and the Navantia shipyards. Saic Motor is a company controlled by the public authorities of Shanghai, which own 63.7% of its shares. This structure differentiates it both from private manufacturers, such as BYD or Geely, and from the large central state companies.
Chinese legislation requires the presence of Communist Party committees in the business structure, where it participates in the company’s strategic decisions. Created in 1955, the company began cooperation with Volkswagen in the 1980s, which allowed the Santana model, a luxury sedan, to be manufactured in China and also maintains joint ventures with General Motors. Although it has several brands, such as Maxus, Wuling or Baojun, its main brand in Europe is MG. A historic British manufacturer called Morris Garages that went bankrupt and was bought by the Chinese.
Currently, the Saic group operates in about 170 countries and has more than 3,000 dealers abroad and more than seven million sales outside China. In May it was the first Chinese manufacturer to exceed 100 million vehicles produced since its founding; Last year it sold 4.5 million vehicles, with an increase of 12.3% and its sales abroad exceeded one million units, with an increase of more than 3%. This foreign push is produced by the decline in sales in its country of origin, whose market is marked by the price war and competition from new electric vehicle manufacturers.
In the case of Saic, the EU applies an additional tax of 35.3%, the highest among large Chinese manufacturers, since Brussels considers that it has benefited from public subsidies that damage the principle of equal competition. Although not long ago Saic said it was not interested in selling in Europe and the United States until it dominated the Chinese market, the reality is that MG has become one of its main avenues for expansion in Europe, now conditioned by community tariffs on electric vehicles manufactured in China. Along these lines, the Ferrol factory project appears as a way to reduce the impact of these rates. Presented as an industrial opportunity for Galicia, the initiative has come under the focus of national security due to the proximity of the future plant to the military arsenal in this same location. This circumstance has led to reports from Defense and intelligence services, which warn of the risk of espionage due to the proximity between the place where this factory would be located and the Ferrol military arsenal and the Navantia shipyard, where work is carried out with US military systems.