*This content was translated by AI.
According to a Reuters report on the 28th, global automaker Stellantis and Chinese car brand Hongqi are reportedly discussing contract manufacturing of vehicles at a Spanish plant.
The negotiations involve not only direct cooperation between the two companies but also proceed through a joint venture with Leapmotor. Stellantis holds a 20% stake in Leapmotor, while Hongqi’s parent company, First Automobile Works, holds 5%. Through this equity structure, Stellantis is playing a role in supporting the European expansion of Chinese brands by leveraging Leapmotor.
Hongqi, established in 1958, has long served as a ceremonial vehicle for China’s leadership and is now actively seeking to enter the European market. The strategy aims to reduce costs associated with building its own factories and to quickly enter the European market by utilizing Stellantis’ idle production facilities. Additionally, it is pushing for local production to avoid tariffs on Chinese-made imported vehicles imposed by the European Union. Hongqi plans to establish a dealer network of over 200 locations in Europe by 2028 and launch more than 10 models of electric vehicles and HYBE-led models.
Stellantis is facing issues with low factory utilization rates in Europe. In response, it is also considering additional cooperation with Chinese brands such as Dongfeng, Xiaomi, and Xpeng. The intention is to generate revenue by utilizing its own factories as contract manufacturing bases for Chinese brands and to alleviate pressure to close plants. Furthermore, through partnerships with Chinese brands, it appears to be pursuing a strategy to flexibly respond to market changes and to guide these brands’ independent entry into Europe within its own system.
Spain is being mentioned as a production hub due to the combination of low labor costs and Stellantis’ production base. If Hongqi begins production in Spain, the era of Chinese high-end brands competing directly on the European mainland could be accelerated.
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*This content was translated by AI.
