“Honorary registration.” That was the note that Pedro Sánchez gave to the Chinese car that he had briefly tested during his visit to the Asian country in September 2024. The statement did not go unnoticed because while Europe tried to stop China’s entry into the European automobile market by all means, Spain distanced itself from this strategy.
That declaration, however, had begun to take shape much earlier. In July, Europe had already activated what are known as “compensatory duties” to Chinese cars. It was a temporary measure before it was firmly decided whether to apply it or not duty to the companies, their amount and how they would be carried out.
In October, the decision was made definitively and at the end of the month tariffs began to be charged to all Chinese electric cars. The fees that each brand must pay are specific for each of them depending, in the eyes of the European Union, on how many subsidies they have received from the Chinese Government and how much they have collaborated with European investigations.
At first, Spain defended the lifting of tariffs against these vehicles, but as the months passed, little by little, its position changed. In April 2024, Chery had announced that it was purchasing the Nissan plant in Barcelona to produce Omoda and Jaecoo cars there. Along the way, Ebro was reborn, At the moment they are Chinese cars although the name is Spanish.
The movement could have been key to eroding the Spanish position. The second push came from the Chinese Government: tariffs on Spanish pork. The threat of putting obstacles in a market that Spain dominates paid off. During the September visit, Pedro Sánchez already pointed out that “we need to reconsider our position”in relation to tariffs. And he stressed that “we do not need another war, in this case a trade war,” in words collected by The Country.
Spain went from voting in favor of tariffs in 2023 to abstaining in the 2024 vote. A movement that said more about positioning itself against them than about granting with its silence. Two years later, Spain is the preferred gateway for Chinese manufacturers to reach Europe.
Spain, land of Chinese cars
At the beginning of October 2024, Chery announced a delay in car production in Barcelona. If Spain was missing a message to opt in favor of lifting tariffs on Chinese cars, there it was. Agencies like Reuters They began to point out that the Chinese State was pressuring its manufacturers to withdraw their investments from where the trade barrier against the country had been supported.
Europe intended attract investments with tariffs and for months we thought that it could be such a big barrier that China would not be interested in bringing its manufacturing here. But little by little, in a constant trickle, Chinese investments have arrived. And Spain has done business with it.
Since 2024, Chery has invested in Spain, taking over a factory that had been almost completely stopped for years. Now the latest news is that Geely and Ford have reached an agreement to produce cars at the Almussafes plant in Valencia. The American company maintained its facilities at half throttle but starting in 2028, up to four different cars should leave through its doors.
Along the way, Geely and Renault, which own Horse, decided that the development and production of their combustion engines would leave the Valladolid plant. Stellantis and CATL reached an agreement to build a battery plant in Zaragoza and feed the automobile conglomerate’s small electric cars. As a consequence, Stellantis will also produce Leapmotor cars on Spanish soil.
Besides, SAIC has announced an investment in Galicia to produce MG cars there. As is the case with Barcelona, this last plant will nourish the market for cars assembled at destination through kits but will serve to give some life to the industrial environment from the north of Spain. At the same time, Spanish ports have been consolidated as a perfect space to unload Chinese cars in their previous distribution step through Europe.
Spain has several advantages over its competitors. We are a powerhouse in car manufacturing. This had the counterpart that with an electric car that requires fewer employees, thousands of layoffs have swept over the Spanish labor market. But we also have a qualified workforce and facilities already built to do this work.
This is a value for those companies that are looking for already installed facilities to produce as soon as possible, even if it is through kits. But in addition, we are also a country with more competitive production costs than other countries north of the Pyrenees because our salaries are cheaper but the price of energy is also less expensive. This positions us as a very interesting space. to produce small cars that offer narrower profit margins.
And if those were few incentives, Spain is buying many Chinese cars. With a proposal to offer more equipment and technology than rivals for the same price or even less, Chinese cars have gained many followers. So far this year, the MG ZS and the BYD Atto 2 They are already two of the 10 best-selling cars in our country.
Last year was a year of consolidation for Omoda and Jaecoo and an opportunity for MG and BYD to continue gaining ground. Without tariffs on cars with combustion engines, five of the 10 best-selling plug-in hybrid cars in Spain are already Chinese.
The reception has been so great that Geely is also looking for its own niche. GWM announced a few weeks ago his arrival in Spain. Changan (which is the origin of Mazda electric cars) already operates in our country. Zeekr will try to make a raid in the field of premium electric and plug-in hybrid cars. BYD’s Denza has also recently arrived.
In three years, Spain has gone from supporting tariffs on Chinese electric cars to completely embracing its cars. He has done it in a complicated game of balance but the fact is that The automobile industry in Spain represents almost 10% of the GDPis the one that exports the most products and the second European manufacturer.
And that’s saying a lot.
Photo | Ford, Geely and Ebro
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