MG Motor, the passenger vehicle brand owned by China’s SAIC Group, has confirmed plans to establish its first manufacturing facility within the European Union, selecting north-western Spain as the location for a new production plant.
The project, valued at approximately €200 million, is expected to become a key element of the company’s long-term European expansion strategy as Chinese automakers increasingly seek local production capacity within the region.
The factory will be built in the Galician port city of Ferrol and is scheduled to begin operations in 2028.
Local Production Strategy
The investment comes as Chinese automakers face growing pressure to localize manufacturing in Europe following the European Union’s introduction of additional tariffs on battery-electric vehicles imported from China.
SAIC has been among the manufacturers most affected by the measures. The company faces additional tariffs of 35.3% on Chinese-built electric vehicles, on top of the EU’s standard 10% import duty.
As a result, SAIC’s electric vehicles imported from China are subject to a total tariff burden of 45.3%.
However, MG’s European portfolio extends beyond battery-electric vehicles and includes hybrid, plug-in hybrid and internal combustion engine models, which remain subject only to the standard 10% import tariff.
Two-Phase Development Plan
According to MG Motor, the new facility will be developed in two phases.
Once fully completed, the plant is expected to have annual production capacity of up to 120,000 vehicles.
The project is also expected to create approximately 2,000 jobs in the region.
William Wang, Managing Director of MG Europe, said the investment reflects the company’s commitment to strengthening its presence in the European market.
“By investing in local capabilities, a stronger European presence and a more competitive automotive ecosystem, we are accelerating Europe’s path towards a smarter and more sustainable mobility future,” Wang said.
Models Yet to Be Confirmed
MG has not disclosed which vehicles will be produced at the Spanish facility.
The company also has not confirmed whether the factory will focus exclusively on electric vehicles or manufacture a mix of powertrains.
Given the tariff environment, battery-electric models could become a key part of the plant’s production strategy, although future regulatory and trade developments may influence product decisions before production begins.
Spain Emerging as Hub for Chinese Automakers
The announcement further strengthens Spain’s position as an emerging manufacturing base for Chinese automotive brands entering Europe.
SAIC had been evaluating European production opportunities since 2023, before the EU introduced additional tariffs on Chinese-built electric vehicles.
Galicia gradually emerged as the preferred location, partly due to its strong maritime connections with the United Kingdom, which remains MG’s largest European market.
The company had previously considered other potential locations, including Hungary.
Growing Chinese Investment in Europe
MG is not the only Chinese automaker expanding manufacturing operations in Spain and Europe.
Chery began vehicle production in Barcelona in late 2024 through its partnership with Ebro-EV Motors, utilizing a former Nissan factory to manufacture vehicles for the Spanish market.
Meanwhile, Leapmotor is preparing to produce the B10 electric SUV at a Stellantis facility near Zaragoza.
Elsewhere in Europe, BYD is expanding production at its Hungarian plant, while Xpeng and GAC have utilized assembly partnerships in Austria through Magna Steyr.
MG Strengthens European Presence
MG has become one of the fastest-growing Chinese automotive brands in Europe through a strategy that combines electric vehicles with hybrid and conventional powertrains.
The company sold more than 300,000 vehicles across Europe, including the United Kingdom, last year.
Hybrid vehicles were a major contributor to growth, with sales increasing significantly during the year.
Among MG’s battery-electric offerings, the MG4 EV has emerged as one of the brand’s most successful models, helping establish MG as a significant player in Europe’s increasingly competitive electric vehicle market.
The new Spanish factory is expected to play an important role in supporting the brand’s future growth while reducing its exposure to import tariffs and strengthening its manufacturing presence within the European Union.