Hongqi wants to produce its vehicles in one of Stellantis' plants located in Spain

Hongqi, one of the brands belonging to the Chinese state group FAW, is currently in talks with Stellantis with the aim of starting production of its vehicles at one of the latter’s plants in Spain. That is at least what a recent report claims, based on statements from internal sources at the Chinese company.

Leapmotor, which already plans to produce several models at Stellantis’ Figueruelas plant near Zaragoza, appears to be playing a prominent role in these negotiations. The point connecting all of them is that both Stellantis and FAW hold a stake in the capital of Leapmotor, although Stellantis’ share carries greater weight. Leapmotor is developing its own supply chain to carry out production of several models at Figueruelas, and Hongqi would now be interested in also taking advantage of all that infrastructure.

This possible collaboration falls within Stellantis’ strategy of seeking Chinese partners to optimise the use of its European plants, which in some cases have unused additional capacity. In addition to the consolidated agreement with Leapmotor, the group has previously held contacts with other Chinese brands such as XPENG, Xiaomi and Dongfeng. The talks with Hongqi represent a new chapter in this strategy.

For Chinese manufacturers, collaboration with Stellantis is also very advantageous, so everyone comes out ahead. Producing in Europe makes it possible to use already established supplier networks and logistics, speed up market entry and, most importantly of all, avoid the special tariffs that the European Union imposes on electric vehicles imported from China.

A change of direction for the Chinese brand

Hongqi, known for manufacturing the official limousines of the Chinese government, is now seeking to grow in the premium segment with models aimed at the general public. The company plans to launch more than a dozen electric and hybrid vehicles in Europe by 2028. Reaching an agreement with Stellantis to use one of its plants would accelerate these plans and allow it to save the hundreds of millions of euros needed to build a production plant on the continent. Hongqi aims to produce one million vehicles a year from 2030, of which around 100,000 will be produced in Europe.

Finally, it should be noted that, apart from the negotiations with Stellantis, the Chinese manufacturer has a plan B, which would involve producing its vehicles at a plant located in Hong Kong, where export tariffs would be more favourable than from mainland China.