The global automotive industry is undergoing a significant restructuring of production capacity. Numerous overseas traditional automakers are persistently scaling back inefficient production lines for internal combustion engine vehicles and divesting non-core manufacturing assets. Concurrently, Chinese automakers, leveraging their mature new energy technology and robust supply chain advantages, are actively acquiring high-quality idle production facilities worldwide to accelerate their global expansion.
Recently, Geely Auto reached an agreement with Ford to acquire the No. 3 body assembly production line at Ford's Valencia plant in Spain. This facility will be utilized for manufacturing multi-energy vehicles. This wave of global capacity sell-offs stems from the strategic retrenchment of traditional automakers. Faced with declining profitability for combustion engine vehicles and underutilized production capacity, international giants like Ford, Volkswagen, and Stellantis have decided to concentrate resources on electric vehicle development. Consequently, they are shutting down or offloading numerous established combustion engine plants in regions such as Europe, South America, and Southeast Asia at low prices, presenting a golden opportunity for low-cost expansion by Chinese manufacturers.
Acquiring existing overseas plants has emerged as the optimal pathway for Chinese automakers' global foray. Compared to the 3 to 5-year cycle required to build a new factory from scratch, retrofitting an acquired plant takes only about a year to commence production, significantly boosting efficiency. For instance, BYD Company, which took over a Ford plant in Brazil in March 2024, achieved its first vehicle rollout in just 16 months. Great Wall Motor implemented this strategy earlier, acquiring a former Mercedes-Benz plant in Brazil in 2021, with official commencement of operations scheduled for August 2025. The initial annual capacity is set at 50,000 vehicles, serving the entire Latin American market.
Crucially, this localized production model effectively circumvents trade barriers. In an environment where the European Union is imposing countervailing duties and emerging markets are setting high tariffs, establishing production overseas significantly reduces costs and enhances product competitiveness. This shift is propelling Chinese automakers from mere product exporters towards a comprehensive global presence encompassing "R&D, production, sales, and service" across the entire industrial chain. Data indicates that overseas sales of Chinese automobiles surpassed 9 million units in 2025, demonstrating the significant results of this globalization strategy.
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