Key Points:
- China’s state-owned SAIC Motor plans to build its first European Union car manufacturing plant in the port town of Ferrol, located in Spain’s Galicia region.
- Galician leader Alfonso Rueda designated the €200 million (£172 million) project as a strategic priority, expecting it to create over 1,000 direct jobs.
- Construction on the facility will begin in 2027, with plans to reach an annual production capacity of 120,000 vehicles by its second phase in 2028.
- The strategic move allows SAIC’s highly popular MG brand to bypass the European Union’s rising tariffs on Chinese-made electric vehicles.
China’s largest automotive manufacturer has officially taken a major step to establish a permanent industrial foothold in Europe. On Monday, June 1, 2026, the regional government of Galicia, Spain, announced that SAIC Motor Corp plans to build its first-ever car manufacturing facility within the European Union. By constructing a localized production plant, the Shanghai-based state-owned auto giant intends to secure its rapid European expansion and shield its popular brands from escalating international trade wars.
Galician regional leader Alfonso Rueda announced that his administration has officially designated the massive industrial project as a strategic priority. The initiative will require an initial investment of approximately €200 million, which equals about £172 million. The comprehensive project will feature both a high-capacity vehicle assembly plant and a state-of-the-art regional logistics hub. While local authorities have cleared the initial regional hurdles, the project still requires formal, final approval from Spain’s central government in Madrid for foreign direct investment.
SAIC Motor has selected the strategic, northwestern port town of Ferrol in Galicia to host the new manufacturing facility. Establishing the plant near a deep-water port allows the automaker to easily receive heavy machinery, steel, and battery components directly from global supply chains. The regional government expects the new factory to create at least 1,000 direct jobs and generate several thousand additional indirect positions across local logistics, engineering, and maintenance sectors. Furthermore, the facility plans to use a high percentage of locally manufactured components, providing a major economic boost to Spanish auto parts suppliers.
Under the current development roadmap, construction on the Ferrol port facility is scheduled to begin in 2027, pending the final regulatory and environmental approvals. The company expects the plant to become fully operational as early as 2028. Once engineers complete the second phase of the project, the facility will have a maximum capacity of 120,000 vehicles annually, serving as a primary supply hub for the highly competitive European passenger car market.
The strategic logic behind the €200 million Spanish factory centers on a mounting trade dispute between Brussels and Beijing. To protect domestic European automakers from a wave of heavily subsidized imports, the European Commission has systematically increased tariffs on electric vehicles (EVs) shipped directly from China, with some duties rising by over 38%. By establishing a physical manufacturing footprint within the EU borders, SAIC can completely bypass these punitive tariffs, allowing its vehicles to qualify as European-made products and maintain their highly competitive retail pricing.
SAIC’s expansion relies heavily on the incredible resurgence of the historic British brand MG, which the Chinese conglomerate acquired nearly two decades ago. MG has emerged as one of the fastest-growing automotive brands in Europe, with its affordable electric and hybrid vehicles capturing a significant share of the mass market. Indeed, SAIC recently celebrated producing its 100 millionth vehicle globally and reported a 1.5% rise in group sales to 1.3 million units during the first four months of 2026. A stellar 50% surge in overseas shipments to 459,200 units drove this growth, highlighting the urgent need for local European manufacturing.
William Wang, the managing director for MG UK and Europe, emphasized that the new Spanish plant aligns perfectly with the brand’s long-term localization goals. Wang described the move as a major milestone for the “In Europe, For Europe” corporate strategy, which focuses on manufacturing, researching, and designing vehicles locally rather than relying entirely on overseas supply lines. “By investing in local capabilities, strengthening our European footprint and fostering a more competitive automotive ecosystem, we are accelerating Europe’s journey towards a cleaner, smarter and more sustainable mobility future,” Wang stated on Monday.
SAIC’s decision to build in Galicia is part of a much larger wave of Chinese automotive capital flooding into Spain. The country has rapidly emerged as the premier southern European hub for the localization of Chinese electric vehicles. Last week, rival automaker Geely finalized its purchase of Ford’s Almussafes vehicle assembly facilities in Valencia. Similarly, Chery Auto has partnered with the Spanish EV Motors to assemble its Omoda models at a former Nissan factory in Barcelona. At the same time, Stellantis-backed Leapmotor plans to begin production in Zaragoza in the second half of 2026.
Ultimately, SAIC Motor’s plan to construct its first European Union car factory in Spain marks a historic turning page for the global automotive industry. By transitioning from a simple exporter into a localized European manufacturer, the Chinese giant is proving that regional production is essential for surviving rising protectionist trade barriers. As construction preparations begin for the 2027 ground-breaking, the port of Ferrol is poised to become a vital artery for Europe’s clean energy transition. This massive project confirms that the future of electric mobility will not be imported from afar, but built directly within the heart of the European continent.
