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Bob Savic

From Sunderland to Spain, Chinese manufacturers are revitalising idle factories and investing where traditional European carmakers are pulling back.
Chinese carmakers are rapidly transforming from export-oriented manufacturers into embedded participants in Europe’s automotive industrial base, a shift increasingly visible across both continental Europe and Britain.
What began as a strategy focused on exporting low-cost electric vehicles (EVs) has evolved into a broader industrial expansion involving local assembly, manufacturing partnerships, research and development (R&D) centres, supply chain investments and production facilities.
Recent developments involving China’s Chery Automobile and SAIC Motor show that Chinese manufacturers are no longer merely competing with European carmakers; they are increasingly becoming partners in the revitalisation of Europe’s struggling automotive sector.
The latest and perhaps most significant development in Britain is the preliminary agreement between Chery and Nissan to explore production of Chery vehicles at Nissan’s Sunderland facility. Under the memorandum of understanding, Chery passenger vehicles could begin rolling off production lines in Sunderland in the first half of next year, using spare capacity at Britain’s largest automotive plant, which employs about 6,000 workers and has been operating well below its potential.
The agreement reflects a broader trend in which established European and Japanese manufacturers seek new ways to maximise underused factories while Chinese companies seek local manufacturing footprints to support expansion in Europe.

For the British automotive industry, the significance of the Chery-Nissan deal extends beyond the production of a few vehicle models. British vehicle manufacturing has struggled with declining output, high energy costs, Brexit-related supply chain complications and intense international competition.
Bringing Chery brands such as Omoda and Jaecoo into local production could help secure manufacturing jobs, increase factory utilisation and strengthen the viability of one of Britain’s most important industrial assets. Analysts have described the arrangement as a historic moment, one of the first examples of a Chinese automotive brand potentially manufacturing passenger vehicles in Britain on a significant scale.
Meanwhile, China’s largest carmaker, SAIC, plans to invest about €200 million (US$232 million) in a manufacturing facility in Spain’s Galicia region, which would be its first in the European Union. The plant, which will produce vehicles for the MG brand, is expected to have an annual capacity of 120,000 and begin operations in 2028, following construction next year. The project is expected to generate around 1,000 direct jobs and many more indirect positions through suppliers and logistics activities.
SAIC’s Spanish investment also highlights the strategic rationale behind Chinese manufacturing expansion. By producing vehicles within the EU, Chinese companies can reduce exposure to tariffs and present themselves as contributors to European industrial development. For Spain, which has actively sought new automotive investments following restructuring across the European industry, Chinese capital offers an opportunity to preserve manufacturing expertise and employment.

These developments are part of a much larger trend. Chery already has plans for production activities in Spain through cooperation with a local partner and former manufacturing facility. It is also opening R&D operations in Liverpool. Other Chinese manufacturers such as BYD, Geely, Xpeng and Great Wall Motor continue expanding their European presence.
Increasingly, Chinese companies are choosing an “in Europe, for Europe” production model combining local assembly, European suppliers and region-specific product development.
The rise of Chinese carmakers in Europe coincides with significant challenges facing traditional European manufacturers. Many European producers have struggled to maintain profitability during the transition to electrification. Against this backdrop, Chinese carmakers may offer an unexpected source of industrial renewal.
Unlike many Western manufacturers that are reducing capacity, Chinese companies are expanding production and seeking new markets. Their willingness to use underused European factories, invest in new facilities and establish local supply chains could help preserve industrial employment that might otherwise disappear. The Sunderland agreement illustrates this possibility clearly: a factory facing underuse gains production volumes, while a rapidly growing Chinese brand gains access to local manufacturing.
This does not mean Chinese investment is without controversy. European policymakers remain concerned about strategic dependence, state support and the competitive impact of Chinese manufacturers. The EU imposed additional duties on some Chinese EV imports following anti-subsidy investigations, creating tensions between Brussels and Beijing, before coming to an agreement on allowing Chinese manufacturers to commit to price undertakings and local investment to avoid tariffs. These trade measures may unintentionally accelerate Chinese localisation efforts.


Britain occupies a somewhat distinctive position in this landscape. Unlike the EU, Britain did not impose equivalent tariffs on Chinese EVs, making the country an attractive destination for Chinese brands seeking market share.
Chinese-built vehicles already account for a growing proportion of British car sales, and manufacturers such as Chery have outlined explicit localisation strategies focused on long-term British operations. The Sunderland agreement may therefore represent the beginning of a broader wave of Chinese industrial investment in the British automotive sector.
Overall, the expansion of Chinese carmakers across Europe represents one of the most important developments in the global automotive industry. The recent Chery-Nissan agreement in Sunderland and SAIC’s Spanish factory project show that Chinese companies are moving beyond exports towards deep industrial integration within European markets.
While concerns about competition and strategic dependence will remain, Chinese investment is increasingly filling a gap left by underinvestment, declining capacity utilisation and weakening competitiveness among some traditional manufacturers.
In this sense, Chinese carmakers are not simply challengers to Europe’s automotive industry. They may become crucial contributors to preserving factories, sustaining jobs and supporting the next phase of automotive manufacturing across Europe and Britain.


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Illustration: Craig Stephens

A Nissan logo at a car showroom in Sunderland, Britain, on June 29, 2016. Photo: Reuters

A poster of an MG model, a brand of Chinese state-owned carmaker SAIC, on display at a car showroom in Santander, Spain, on June 13, 2024. Photo: Reuters

China’s SAIC plans to build first EU car plant in Spain’s Galicia

Alfonso Rueda, president of the regional government of Galicia. Photo: EPA

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A shopper passes a display of Chinese-made cars, including models from Chery and Omoda, in a shopping centre in Johannesburg, South Africa, on April 23. Photo: Reuters

People view a BYD electric car at an event in Harrogate, UK, on May 8. Photo: Reuters

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A Leapmotor Lafa5 Ultra is on display at the Beijing Auto Show on April 24. Photo: AFP

The announcement comes less than two months after Leapmotor opened its first overseas research and development hub in Munich. Photo: Getty Images

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A BYD Sealion 7 on display at the Baltic Motor Show in Riga, Latvia, on April 24. Photo: EPA

People visit the BYD exhibition zone at the IAA Mobility trade fair in Munich, Germany, in September. Photo: Xinhua

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From Chery in Britain to SAIC in Spain, Chinese carmakers are investing in new plants and revitalising old ones as they localise production


From Chery in Britain to SAIC in Spain, Chinese carmakers are investing in new plants and revitalising old ones as they localise production.


Electric & new energy vehicles

Automotive industry

China

European Union

Britain

Nissan

SAIC Motor

Spain

Geely

Xpeng

Great Wall Motor

EVs: Companies

EVs: Industry Trends

Expresses the views, ideas and conclusions of the author. (Eg. Enough of Crazy Rich Asians, think of crazy poor Hongkongers.)


China’s EV giants are breathing new life into Europe’s ailing car industry

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}From Chery in Britain to SAIC in Spain, Chinese carmakers are investing in new plants and revitalising old ones as they localise production

From Chery in Britain to SAIC in Spain, Chinese carmakers are investing in new plants and revitalising old ones as they localise production