China's SAIC Motor plans its first EU factory in Spain's Galicia, with a 200 million euro initial investment, 120,000-vehicle annual capacity and an operational target of end-2028.
Summary: Sources: Reuters; Xinhua
- SAIC Motor will build its first European Union manufacturing facility in Galicia, northwestern Spain, located between the port of Ferrol and the town of As Pontes
- Initial investment is set at 200 million euros ($232 million), with construction due to begin in 2027 and the plant targeting operational status by end-2028
- Full capacity at the site is expected to reach 120,000 vehicles per year once a second phase is complete, with the project also including a logistics and vehicle assembly hub near Ferrol port
- The project is expected to create more than 2,300 jobs locally, including around 1,000 direct positions, with plans to use significant volumes of locally sourced components
- Central government approval for foreign direct investment is still required; SAIC owns the MG brand, which has built a substantial following across European markets
- China's Chery, in a joint venture with Spanish firm EBRO, is separately planning to begin production at a former Nissan plant in Barcelona by end-2026 or early 2027, targeting up to 150,000 vehicles annually by 2029
Chinese automaker SAIC Motor has announced plans to build its first manufacturing facility inside the European Union, selecting the Galician port town of Ferrol in northwestern Spain for a factory that will produce electric vehicles under the MG brand and related electrified powertrains.
The initial investment in the project is set at 200 million euros, equivalent to around $232 million, with construction scheduled to begin in 2027 and the plant targeting full operational status by the end of 2028. The site, located between the port of Ferrol and the nearby town of As Pontes, will include an adjacent industrial zone for vehicle assembly and logistics to facilitate export from the port. Once a second phase of development is complete, the facility is expected to reach an annual production capacity of 120,000 vehicles and support more than 2,300 jobs in the region.
The project still requires approval from Spain's central government for foreign direct investment clearance, a procedural step that adds some conditionality to the timeline. SAIC has said it intends to source a significant proportion of components locally, which should strengthen the case for regulatory sign-off and broaden the project's economic footprint beyond the factory gates.
SAIC's move is the clearest signal yet that Chinese automakers are shifting from an export-led European strategy to one rooted in local production. Manufacturing inside the EU allows them to avoid the additional import tariffs Brussels imposed on Chinese-made electric vehicles in 2024, while also positioning their brands as European employers rather than foreign competitors. MG has been among the most successful Chinese nameplates in Europe, benefiting from competitive pricing during a continent-wide EV price war.
Spain is fast becoming the preferred destination for this manufacturing push. Chery, in a joint venture with domestic partner EBRO, plans to begin production at a former Nissan plant in Barcelona by late 2026 or early 2027, with an ambition to produce up to 150,000 vehicles a year by 2029. With one of Europe's largest existing automotive industries, Spain offers both the infrastructure and the workforce to absorb Chinese capital at scale, even as incumbent European manufacturers watch the competitive landscape tighten around them.
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The investment marks a significant step in Chinese automakers' strategy of manufacturing inside the EU to sidestep import tariffs and gain direct access to European consumers, with MG-brand vehicles already demonstrating strong regional demand. Spain is emerging as the preferred landing zone for this push, with both SAIC and Chery now committed to production facilities on the Iberian Peninsula. For the broader European auto industry, the arrival of Chinese manufacturing capacity on home soil raises competitive pressure beyond the trade measures Brussels has deployed against Chinese EV imports.
