Chinese carmaker Chery is in preliminary discussions with the Volkswagen Group about using the German automaker’s production facilities to manufacture vehicles in Germany, potentially for its new volume brand Lepas, according to a report by Automotive News Europe citing an unnamed source.
Chery confirmed it is evaluating production in Germany but has not disclosed any specific partnership plans. Concerns over high labor costs, strong union presence, and regulatory complexity remain key factors in the company’s decision-making process. “We need to study the feasibility plan, because in Germany, the situation is very, very complicated,” said Charlie Zhang, vice president of Chery International.
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Volkswagen has reportedly been open to sharing surplus capacity at its German plants with foreign partners. Earlier this year, German media speculated that Volkswagen could pursue a joint venture with a Chinese brand—similar to Stellantis’ arrangement with Leapmotor—to manufacture electric vehicles in Europe. Senior VW executives have since said they are exploring such collaborative opportunities.
Chery is also ramping up production at its existing European base in Spain, where it assembles its Tiggo SUV lineup at a former Nissan plant in Barcelona. “We’re about to resume full-scale output by the end of this year,” Zhang said, noting that the facility has the potential to produce up to 200,000 units annually. The company plans to introduce plug-in hybrid and battery-electric variants of the Omoda and Jaecoo models for the European market.
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The company is simultaneously exploring further expansion options, including a potential EV partnership in Turkey. Although the Turkish presidency claimed Chery was planning a $1 billion investment in an EV plant in Samsun with a 200,000-unit capacity, Chery later denied such a commitment.
The possible German production deal would center on Chery’s newly launched Lepas brand, which recently debuted its first vehicle, the L8 SUV. While the model currently features a conventional petrol drivetrain, both plug-in hybrid (PHEV) and fully electric (BEV) versions are expected.