(David Zalubowski/Associated Press, File)
key takeaways:
- Ford and Geely agreed on July 23 to form a joint venture at Ford’s Valencia-area factory in Spain, with production of four new models starting in 2028.
- The deal aims to cut vehicle costs through shared production and purchasing as Chinese brands gain European market share and competition intensifies.
- The venture is awaiting regulatory approval and is expected to begin operations in the first half of 2027, while production of the Kuga will continue.
Ford Motor Co. and China’s Geely Automobile Holdings agreed to form a joint venture at the U.S. carmaker’s underutilized factory in Spain to co-develop electric cars and bring four new models to the plant.
The companies said on July 23 that Ford would own two-thirds of the venture, while Geely would own the remaining stake. Plans for the facility near Valencia include an additional member of the jointly developed Ford crossover and Bronco sport utility vehicle family. The first cars will start rolling off the production line in 2028.
Ford produces the Kuga crossover at the Almusafes facility. Subject to regulatory approval, the venture with Geely is expected to begin operations in the first half of 2027, while Kuga production will continue uninterrupted.
“This agreement addresses the new realities of the European market – intense global competition, continued cost pressures and strict regulation,” Ford said in a statement.
The collaboration, which has been in the works for months, highlights Spanish Prime Minister Pedro Sánchez’s determination to increase Spain’s role in European automaking as the segment restructures. Major supplier networks are attracting Chinese carmakers by providing a local manufacturing base to circumvent EU tariffs on their EV imports, while offering skilled labor and lower energy costs.
The initiative “demonstrates Spain’s ability to attract major investments and participate in major transformations that will shape the future of mobility,” Sanchez said at the announcement ceremony.
Production line at the Almusafes Ford Motor Plant near Valencia, Spain. (David Ramos/Getty Images)
The joint venture ensures long-term stability and the ability to create high-tech manufacturing jobs in Valencia, Ford said. The companies aim to unify their production volumes and purchasing power to reduce the cost of each vehicle made there.
Pressure to cooperate is growing rapidly as Chinese manufacturers gain a larger share of Europe’s car market, strengthening the case for building vehicles closer to local buyers. SAIC Motor Corp-owned MG and BYD Co together accounted for 5.4% of registrations last month, compared with 3.4% a year earlier.
The Ford-Geely venture also reflects broader convergence between European carmakers looking for cheaper technology and fuller factories and Chinese groups looking to establish a local manufacturing foothold. Stellantis NV and Leapmotor are adopting a similar model at Spanish plants in Zaragosa and Madrid.
The Geely deal will also support Ford’s plan to introduce five new passenger vehicles in Europe by 2029. The new crossover will be designed by Ford and jointly developed with Geely, while the compact Bronco will be designed for European roads and positioned as an adventure-focused SUV. Both will be offered with a choice of powertrains.
Geely plans to build two fully electric SUVs at the site, marking a significant expansion of its European manufacturing presence. The Chinese company is introducing models including the EX5 electric SUV across the region as it looks to establish the Geely brand alongside its existing Volvo, Polestar, Zeekar and Lynk & Co operations.
Chinese brand
China’s Chery automobile company and Spanish brand Ebro have revived a former Nissan factory in Barcelona, which now employs more than 1,500 people. BAIC Motor Corp is set to produce off-road cars in the Andalusia region with the revived brand Santana. The most ambitious plan is a partnership between Stellantis and CATL for a 4.1 billion euro ($4.7 billion) battery factory in Zaragoza, set to begin operations in 2028.
The Spanish government has said that Chinese investment will create thousands of jobs, while acknowledging that some projects will initially rely on Chinese workers and technology.
Ford has a long relationship with Geely, having sold Volvo Cars to the Chinese company 16 years ago. The Almusafez plant, once Ford’s largest plant outside the US, is operating at less than a quarter of its annual capacity of 450,000 vehicles.
Written by William Wilkes, Daniel Bastiro and Clara Hernánz Lizárraga
