"Making a Strategic Move" in Spain: Geely's European "Local" Moment

On July 23, 2026, Valencia, Spain. On this day, Geely Automobile and Ford Motor—two "old friends" shaking hands again after 16 years—signed a significant agreement in a factory with nearly 50 years of history.

Geely Automobile announced the acquisition of a 34% equity stake in Ford's Valencia, Spain factory for 221 million euros. Both parties established a joint venture, sharing one of Europe's largest automobile factories with an annual capacity of about 500,000 units. Geely will launch two new energy models here, with the first vehicle rolling off the line in 2028; Ford will continue producing three multi-energy models such as Kuga.

This is not only capacity sharing between the two automakers but also a key strategic move in Geely's globalization strategy—from "going out" to "integrating in," from complete vehicle exports to local manufacturing. Geely is exploring its own path amidst the changes in the global automotive industry.

The "Trust Vote" from 16 Years Ago

To understand the origins of this cooperation, we must turn the clock back to March 28, 2010.

On that day, Geely Holding Group acquired Volvo Cars entirely from Ford for 1.8 billion USD. At that time, Geely was an unknown Chinese private car company, while Volvo was a well-known luxury brand. This "small swallowing big" deal shocked the global automotive industry.

But what kept this story going until now was not the deal itself, but what happened after the deal.

After taking over Volvo, Geely did not rush to integrate but chose to "let the tiger return to the mountains"—keeping Volvo's Swedish headquarters and Belgian factories, respecting its independent development system, and fulfilling all commitments to the brand, employees, and unions made during the acquisition. Ford, as the former parent company, witnessed throughout how Geely protected and revived a classic brand with pragmatic actions.

This commercial integrity of "doing what you say" won Ford's respect and trust for Geely. 16 years later, when Ford faced challenges in capacity efficiency and the market in Europe—the Valencia factory has an annual capacity of 500,000 units, but actual production in 2025 was less than 100,000 units—it chose to extend an olive branch to Geely again. Through capacity sharing, it aims to create new energy vehicle products for Geely and Ford brands for the European market, improve capacity utilization, and jointly expand the regional market. Behind this lies trust accumulation across time cycles.

As Geely Holding Group Chairman Li Shufu often said internally: The fun of business lies in making friends and doing deals at the same time, achieving win-win results in every cooperation, and leaving pleasant memories. This philosophy was concretely embodied in this cooperation.

"Light Asset" Going Overseas: Building a "Network of Friends" Instead of Factories

Unlike most Chinese automakers choosing to "build their own factories" for going overseas, Geely took a differentiated path.

In April this year, Geely Holding Group clarified a new strategy for overseas expansion: instead of building new production factories, it proceeds to advance business layout through cooperation, integration, and reviving existing capacity. For Geely, in the context of tense geopolitical situations and changing global patterns, prioritizing the use of existing factories by partners is a more pragmatic choice.

This "light asset" logic has been repeatedly verified in Geely's previous global layout:

Volvo's European factories provide a manufacturing pivot for Geely to enter high-end markets;

Proton's Southeast Asian network allowed Geely to build a High-Tech Automotive Valley in Tanjong Malim, Malaysia;

Renault's Brazilian factories and channels support new energy cooperation between both parties in the Latin America and Africa market;

The establishment of HORSE Powertrain with Renault achieves deep technical synergy for the global market.

Geely and partners use these ready resources together. This Geely-style localization method improves overseas and market expansion efficiency while reducing regional barrier risks. Wanlian Securities Investment Consultant Qu Fang evaluated: "This belongs to a light asset, high efficiency 'going overseas' layout mode. Compared with building factories, the investment is lower, the implementation cycle is shorter, and the pace of capacity expansion can be adjusted flexibly."

The Spanish joint venture is the European debut of this model. Geely secured a 34% equity stake and stable subcontracting capacity with only 221 million euros, quickly obtaining a production base compliant with EU standards. Relying on Ford's accumulated European supply chain and local operation experience over many years, it greatly reduced the cost and risk of overseas layout.

From "Product Export" to "System Going Overseas"

In the first half of 2026, Geely Automobile's overseas sales reached 474,000 units, up 158% year-on-year, exceeding the total export volume of the full year of 2025. Among them, new energy exports were 277,000 units, surging 585% year-on-year, accounting for 58%.

Behind these numbers is a net Geely wove globally over the past decade-plus—acquiring Volvo, investing in Proton, holding Lotus, and cooperating with Renault to build factories in Korea and Brazil. Now, this net has added a key node: Spain.

Geely Automobile Group CEO Gan Jiayue once emphasized that Geely promotes international development by adhering to the strategies of "global synergy" and "regional deep plowing." Geely has built a global strategic system composed of "five major design centers, five major research and development centers, five major test areas, five major energy technology forms, and five major AI intelligent ecosystems."

In January 2026, Geely Holding released the "One Geely, Leading Comprehensively" 2030 strategic goal: achieving a breakthrough in global total sales of 6.5 million, revenue exceeding 1 trillion yuan, and ranking among the top five global automakers by sales by 2030. The core of the new strategy is integration—unified scheduling in R&D, manufacturing, supply chain, and global market levels, reducing internal duplicate investment, and improving efficiency through scaled synergy.

In terms of overseas layout, Geely focuses on the "3+2" five major markets: Europe, Eastern Europe, ASEAN, Latin America and Africa, and Middle East Asia Pacific. Plan to increase overseas outlets to 2,200 by the end of 2026. Based on the strong performance in the first half of the year, Geely has adjusted the full-year export target to 900,000 units.

Why Europe? Why Now?

Europe is the highland of the global automotive industry and a key market for Geely's global strategy. But the threshold of the European market is rising.

Currently, the EU has set high additional tariffs on imported electric vehicles from China, and direct export would greatly compress price competitiveness. Geely's choice to localize production in Spain is essentially using "local manufacturing" to bypass tariff barriers. A Citigroup research report points out that local production bases help the company avoid import tariffs that the EU might impose on Chinese electric vehicles and greatly improve price competitiveness.

This strategy was also used by foreign automakers entering China thirty years ago—in the 1990s, international giants like Volkswagen and General Motors established joint ventures with Chinese automakers to enter the Chinese market, bypassing high import tariffs through local production. The logic at the time was "trading technology for market." Now the roles are reversing—under the premise of acting in accordance with laws and regulations, Chinese automakers take technology and products to Europe to "trade capacity for market."

A few words by Ford Europe President Jim Baumback at the signing scene were particularly meaningful. He evaluated Geely as "one of the fastest-growing automotive forces globally," possessing world-class electrification capabilities, speed, and vast global scale; while Ford has over a century of engineering wisdom, an unbreakable bond with European users, and the best workforce. He believes the combination of the two will form unparalleled competitive advantages. This statement is both recognition of Geely and reflects Ford's practical considerations for this cooperation.

From "Going Out" to "Integrating In"

Geely Automobile Group Vice President Nan Shengliang defined this cooperation as a "milestone event in global development." He stated that this will further solidify Geely's localization layout in Europe, enabling Geely to truly establish roots in and deeply cultivate Europe with safe and low-carbon products and leading new energy technologies.

From the European media title at the 2006 Frankfurt Motor Show "The Chinese are coming, but can their cars run?" to sharing a factory with Ford in the European heartland in 2026—in 20 years, Geely has walked the complete cycle from being questioned to being recognized.

Behind this is a deep evolution of Geely's globalization strategy: from simple product export to "going out" to establish overseas sales networks; from early capital acquisition learning advanced brands and technologies to "integrating in" through local manufacturing to deeply integrate into regional markets. Geely is exploring not simply product output, but a new paradigm of "using global resources to serve regional markets, using local capabilities to win global competition."

Ending Words

This factory in Valencia, Spain, was once an important asset of Ford in Europe, and now is becoming a key piece on the board of Geely's new globalization game. From the "small swallowing big" of acquiring Volvo to the "light asset" of regional expansion—Geely has written a progressive history of Chinese automaker globalization in 16 years. And this history is still being written.