(July 23): Ford Motor Co and China’s Geely Automobile Holdings Ltd agreed to form a joint venture (JV) at the US carmaker’s underused factory in Spain to co-develop electric cars and bring four new models to the plant.

Ford will own two-thirds of the venture with Geely holding the remainder, the companies said on Thursday. The plans at the facility near Valencia include a jointly developed Ford crossover and an additional member of the Bronco sport utility vehicle (SUV) family. The first cars will start to roll off the production line in 2028.

Ford currently produces the Kuga crossover at the Almussafes facility. The venture with Geely is expected to begin operating in the first half of 2027, subject to regulatory approval, while Kuga production will continue uninterrupted.

The pact “addresses the new realities of the European market — intense global competition, relentless cost pressure and tightening regulation”, Ford said in a statement. 

The collaboration, in the works for months, highlights Sanchez’s determination to increase Spain’s role in European automaking as the segment restructures. The premier has been courting Chinese carmakers by providing a local manufacturing base to sidestep European Union tariffs on their electric-vehicle imports, while offering a deep supplier network, skilled labour and low energy costs.

The initiative demonstrates “Spain’s ability to attract major investments and to take part in the major transformations that are shaping the future of mobility”, Sanchez said at the announcement ceremony. 

The JV ensures long-term stability in Valencia and the potential to create high-tech manufacturing jobs, Ford said. The companies aim to pool their production volumes and purchasing strength to reduce the cost of every vehicle made there.

The push to collaborate is gaining urgency as Chinese manufacturers win a larger share of Europe’s car market, strengthening the case for producing vehicles closer to local buyers. MG, owned by SAIC Motor Corp, 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 a broader convergence between European carmakers seeking cheaper technology and fuller factories and Chinese groups looking for a local manufacturing foothold. Stellantis NV and Leapmotor are pursuing 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 developed jointly with Geely, while the compact Bronco will be tailored for European roads and positioned as an adventure-focused SUV. Both will be offered with a choice of power trains.

Geely plans to build two fully electric SUVs at the site, marking a significant expansion of its European manufacturing presence. The Chinese company has been rolling out models including the EX5 electric SUV across the region as it seeks to establish the Geely brand alongside its existing Volvo, Polestar, Zeekr and Lynk & Co operations.

China’s Chery Automobile Co and Spanish brand Ebro have revived a former Nissan factory in Barcelona that now employs more than 1,500 people. BAIC Motor Corp is set to produce off-road cars with resuscitated brand Santana in the Andalusia region. The most ambitious plan is the partnership between Stellantis and CATL for a €4.1 billion (US$4.7 billion or RM19.1 billion) battery factory in Zaragoza that is set to start operations in 2028.

Spain’s government has said Chinese investments will create thousands of jobs while acknowledging that some projects initially will rely on Chinese workers and technology.

Ford has a long-standing relationship with Geely, having sold Volvo Car to the Chinese company 16 years ago. The Almussafes plant, once Ford’s largest outside the US, has been running at less than a quarter of its annual capacity of 450,000 vehicles.

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