Chinese automaker plans €200 million factory in Ferrol, targeting 2,300 jobs and 120,000 vehicles annually by 2028.
China’s SAIC Motor Corp announced on Monday its plans to establish a car manufacturing factory in Spain’s northwestern region of Galicia, marking the company’s first-ever production facility inside the European Union. The decision came after more than 85 meetings and 25 visits between Spain and China before the deal was officially confirmed.
The plant will be located between Ferrol and As Pontes in the A Coruña province, with construction scheduled to begin in 2027 and operations expected to start in 2028. Once operational, the facility aims to produce approximately 120,000 vehicles annually under the electrified MG brand.
Investment and Jobs
The project carries an initial investment of around €200 million and also includes a logistics hub. It still requires approval from Spain’s central government for foreign direct investment.
Galicia’s regional Economy Minister María Jesús Lorenzana described the SAIC project as the “largest foreign investment” in Galicia in recent decades.
The project is expected to create approximately 2,300 jobs in its first phase around 2,000 in Ferrol and 300 in As Pontes along with additional indirect employment in the surrounding area.
Why Spain?
SAIC chose Spain over rival candidate Hungary, primarily to reduce the impact of European Union tariffs that impose additional taxes of up to 35.3% on electric vehicles manufactured in China, in addition to an existing 10% import duty on automobiles.
Spain proved particularly attractive to Chinese investors due to its fast-growing economy, one of the fastest in Europe and relatively low energy costs driven by the country’s strong investment in renewable power.
Just four weeks before the announcement, Galicia’s President Alfonso Rueda and Spanish Prime Minister Pedro Sánchez travelled to China together to help finalize the investment deal.
Regional Government’s Response
Galicia’s leader, Alfonso Rueda, welcomed the announcement at a press conference, saying his administration had given the project full strategic priority.
Said Alfonso Rueda, President, Galicia Regional Government.
Our administration has given strategic priority to this project.
Galicia’s Economy Minister María Jesús Lorenzana added:
This will represent the largest foreign investment in Galicia in recent decades.
Construction is scheduled to begin next year, pending the necessary approvals, with the plant set to become fully operational in 2028.
Broader Context
In recent weeks, several other Chinese car brands have also announced plans to manufacture vehicles in Europe. A strategy that allows them to avoid EU customs duties and reduce transportation costs.
The EU, like the United States, has been imposing tariffs on electric vehicles imported from China to protect domestic producers and encourage Chinese carmakers to shift production to Europe and create local jobs.
SAIC owns the MG brand, which has been popular across European markets for several years, with the company prioritizing electrified powertrains across its vehicle lineup. The Galicia plant will use many locally produced components, further strengthening Spain’s position as a growing hub for electric vehicle manufacturing in Europe.
