Ford to share European plant with China’s Geely to cut costs

Ford and Geely announced the creation of a joint venture in Europe to produce electric, hybrid and other low-emission technologies cars at the plant in Valencia, Spain, in one of the most important partnerships in the automotive industry in recent years. The agreement, released last Thursday (23), provides that the North American company will have 66% of the new company and the Chinese company will have the remaining 34%.

According to the two automakers, the operation depends on regulatory approval and should start in the first half of 2027, with the first vehicles coming off the assembly line in 2028. Until then, the unit will continue to manufacture without interruption the Kuga, a plug-in hybrid SUV that is one of the brand’s best sellers on the continent.

Located in Almussafes, on the outskirts of Valencia, the plant has been operating since 1976 and has produced millions of cars, including the first generations of the Fiesta. With a capacity of about 500 thousand units per year, the complex had been underused and will now function as a shared hub between the two companies. The expectation, according to the manufacturers, is to dilute production and development costs by concentrating volume in the same plant.

The reasons for the union

The move comes at a time of strong pressure on traditional automakers, squeezed between strict emissions targets, high costs and the accelerated arrival of Chinese brands in the European market. For analysts, the association with Geely is an attempt by Ford to relearn how to cut costs and develop cheaper models for the region, at the risk of losing ground in Europe.

For Geely, the partnership accelerates international expansion. The company claims to have sold 474,228 vehicles outside China in the first half of 2026, up 158% year-on-year, one of the fastest growth rates among Chinese brands. Producing in Europe, says the group, allows it to strengthen the local presence with products adjusted to the taste of the region’s consumer.

From 2028, the Valencia line should receive new projects. On Ford’s side, a compact version of the Bronco family adapted to the European market and a new multi-energy crossover developed in conjunction with Geely are planned. The Chinese company, in turn, plans to manufacture two all-electric SUVs at the unit. The launches are part of Ford’s plan to bring five new passenger models to European dealerships by 2029.

The cooperation inaugurates the first industrial joint venture between the two companies, but the relationship is old: it dates back to 2010, when Ford sold Volvo Cars to Geely. Under the control of the Chinese group, the Swedish brand underwent a restructuring considered successful, which, according to the companies, helped build the trust that underpins the agreement now signed in Spain.