Chery to begin vehicle production in Spain

THE Spanish government says it is nearing a deal with Chinese manufacturer Chery to begin vehicle production in Barcelona, likely at the former Nissan facility.

It is anticipated that the opportunity could create as many as 1600 jobs, while also giving Chery an important European base from which to build and distribute its cars.

According to Spain’s Industry Ministry, the agreement will be formalised “within days” following positive talks with Chery this week. It is not known if any public aid was offered to Chery as part of the negotiation.

Spain will open two tenders this year for companies to request a total of €1.7 billion ($A2.8b) in loans and grants for electric vehicle production under the PERTE (Strategic Projects for Economic Recovery and Transformation) scheme of incentives that uses European Union pandemic relief funds.

The former Nissan plant in Barcelona was partially handed over to Spanish motorcycle manufacturer Silence and global engineering groups QEV and EV Motors, which planned to turn the facility into a hub for EV production.

EV Motors acquired full control of the facility last month (March) and has played a key role in talks with Chery because it would operate beneath the hub’s umbrella.

Automotive News Europe reports that EV Motors also plans to produce electric pick-ups and vans under its Ebro brand, which could involve potential production and commercial deals with Chery.

Chery is one of several Chinese manufacturers bringing lower-cost, mostly electric vehicles to Europe. It began selling cars in Spain earlier this year.

Chery is also reported to be in talks with the Italian government as it seeks to attract another major manufacturer to the country in addition to the multinational group Stellantis. Italy’s Industry Ministry said it had no information about Chery’s choice for Barcelona for its new plan.

The electric car market is grappling with an aggressive price war and trade tensions between China and the European Union, which is investigating whether Chinese EV manufacturers benefit from unfair state subsidies.

ANE suggests that establishing manufacturing capacity in Spain or Italy, where electric car sales are still relatively low, would fit Chery’s strategy of selling a mix of internal combustion and electrified cars.

With Automotive News Europe