Ford and Geely Agree to Spanish Manufacturing Tie-Up — Update

By Dominic Chopping

Ford and Geely Automobile agreed to a new manufacturing partnership that allows the Chinese automaker to build some of its cars at Ford's Valencia plant in Spain, while also committing to jointly develop a new SUV.

The deal is the latest move by a Western automaker to open its European factory gates to Chinese competitors as they look to fill capacity and secure the future of their production sites amid challenging market conditions.

Tech-heavy Chinese-made cars continue to erode market share for Western carmakers both in China and increasingly in Europe, prompting companies to seek partnerships as a way to tap into Chinese technology while cutting costs through shared purchasing and engineering.

Jeep maker Stellantis said recently that two of its factories in Spain would produce electric vehicles with China's Leapmotor, while a separate deal will see Dongfeng assemble at least one of its premium Voyah-branded electric-vehicle models at a Stellantis factory in Rennes, France.

Ford said in a statement Thursday that Europe represents one of the "fiercest competitive battles" in the global auto industry, with tightening regulation, high operating costs and new competitors that have raised the bar on manufacturing cost and technology.

"By pooling production volume, Ford and Geely will maximize the capacity of the Valencia plant, lower the cost of every vehicle built there, and compete at this emerging cost standard," the company said.

The agreement will see Ford and Geely form a new Europe-focused joint venture that will manufacture passenger vehicles for both brands that are tailored for the European market.

Ford will continue to produce its Kuga at the Valencia plant in addition to a new Bronco SUV, with production starting in 2028.

Geely will manufacture two electric SUVs at the site, with the first model to roll off the production line in 2028, while the two companies are also set to produce a new crossover SUV designed by Ford and jointly developed by Geely.

The companies said the venture supports Geely's international expansion and advances Ford's strategy of using partnerships to compete with speed, efficiency and scale in Europe.

"This partnership shows how automakers are strengthening Europe's industrial base, but we can't do it alone," said Jim Baumbick, president of Ford of Europe.

Baumbick added the deal was possible thanks to a public-private partnership that has seen continuing support from Spain's national and regional governments.

The joint venture will begin operations in the first half of 2027, subject to regulatory approvals.

Under the proposed ownership structure, Ford will own 66% of the new entity and Geely 34%.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

July 23, 2026 09:29 ET (13:29 GMT)