Proposed Chinese car production sites in Europe

REGULAR readers of these pages will have no doubt noticed increased discussion around the number of Chinese manufacturers looking to establish a production base within the European Union.

As sales of cheaper Chinese models soar – particularly on the new energy front – the desire to avoid costly import tariffs (currently 10 per cent) and increase profitability has seen several of China’s biggest vehicle producers eye sites across the EU, including those listed below.

BYD – Hungary

BYD aims to begin production at a new passenger car production facility in Hungary before 2026 as part of its goal of reaching a five per cent share of the European electric vehicle market.

It is reported that the factory will have an annual capacity of 150,000 units, that could be doubled to 300,000 units if the strategy is successful.

Hungary is also to become the site of a massive EV battery production hub with China’s CATL to invest $A10.6 billion in a facility that will produce packs for brands including BMW, Mercedes-Benz and Volkswagen.

Chery – Spain

Chery has said it will produce cars from its Omoda brand at Nissan’s former factory in Barcelona – once home to the Navara and related Mercedes-Benz X-Class – alongside Spanish brand EV Motors.

Production is expected to begin this year, creating as many as 1600 jobs. It is understood that investment for the plant could come in part from the public purse, with European Union pandemic relief funds to part fund the venture.

Spanish EV Motors is further tipped to produce electric vans and pick-ups in partnership with Chery, the vehicles to be sold under the Spanish Ebro nameplate.

Dongfeng Motor – Italy

Dongfeng Motor is in talks with the Italian government to open a plant capable of producing more than 100,000 vehicles per annum.

The Italian government plans to offer Dongfeng Motors several options for the location of the facility, which will initially produce petrol-electric hybrid passenger vehicles.

Aligned with Stellantis via Fiat, Dongfeng Motors could have access to established suppliers across the region, readily allowing it to become an established player not only in Italy, but across the European Union.

“Italy is one of Europe’s largest automotive markets, and for a Chinese car-maker, having local production means that you can supply all other countries in the area,” said Dongfeng Motor Europe head of operations Qian Xie this week.

Leapmotor – Poland

Another Chinese manufacturer with ties to Stellantis is Leapmotor, which is looking at options to produce its cars at one of the parent company’s European sites.

Production of Leapmotor’s T03 battery electric minicar will reportedly commence in Poland from the second half of this year.

Stellantis is further reported to consider producing up to 150,000 Leapmotor electric vehicles at a former Fiat facility in Italy. Production of the low-cost models is tipped to begin from as early as 2026.

“If we have the opportunity because it makes economic sense to manufacture Leapmotors' cars in Italy, of course we will,” said Stellantis CEO Carlos Tavares.

MG Motor – England

Chinese state-owned SAIC brand MG Motor is the top-selling Chinese brand in Europe with some 231,684 units sold in the Union last year.

In supporting that success, MG Motor said it will commit to producing vehicles in the European Union within two or three years and will select a location based on energy and labour costs.

The UK is currently MG Motor’s largest market in the region, owing primarily to associations with the MG brand of yore.

It is therefore reasonable to assume that MG Motor will establish its base in England, likely at what remains of the former MG Rover facility in Longbridge, which is part owned by MG Motor parent, SAIC.

“Building local means you work together with local people. It’s more commitment,” said MG Motor head of Europe and UK operations William Wang.