According to a Reuters report on April 28, Hongqi, China’s premium automotive brand, is holding negotiations with Stellantis to produce vehicles at the group’s factory in Spain, aiming to expand its footprint across the European market.
Sources familiar with the matter stated that FAW Group is conducting negotiations with Stellantis via Chinese EV manufacturer Leapmotor, in which both FAW and Stellantis hold shareholdings. The undisclosed talks are expected to accelerate Hongqi’s European expansion, supporting its plan to launch more than 15 new energy models in Europe by 2028, while avoiding massive capital investment in building new production facilities.
Stellantis has confirmed that it will begin manufacturing vehicles for Leapmotor at its plant in Zaragoza, Spain, later this year. Two insiders revealed that Hongqi vehicles will also be assembled at the same facility.
Earlier this month, Reuters reported that Stellantis was in advanced discussions with Leapmotor to jointly develop an all-electric SUV for its Opel brand based on Leapmotor’s technology, which is also set to be produced at the Zaragoza factory. This indicates that Stellantis is turning its Spanish plant into a key manufacturing hub for cooperation with Chinese partners in Europe.
“This is a viable way for Hongqi to kick off local production in Europe rapidly,” a source directly involved in the negotiations commented. “Leveraging this partnership network, Hongqi is securing a European manufacturing base through Leapmotor and Stellantis.”
It should be noted that the negotiation is still ongoing and may not result in a final agreement. Hongqi, FAW Group and Leapmotor have yet to issue official comments. A Stellantis spokesperson stated: “As part of our regular business operations, Stellantis engages in discussions with industry players worldwide on a wide range of topics, with the ultimate goal of delivering optimal mobility solutions for customers.”
Insiders added that Hongqi targets an annual sales volume of one million units by 2030, with overseas sales accounting for at least 10% of the total. Local production in Spain will mark Hongqi’s first manufacturing foothold in Western Europe.
In terms of product strategy, Hongqi unveiled plans last year to roll out 15 electric and hybrid models across 25 European markets by 2028, and has already launched its compact electric SUV EHS5. By adopting Leapmotor’s EV platform, Hongqi can streamline product development and cut R&D costs significantly.
FAW’s overseas expansion is part of a broader industry trend. Major Chinese automakers including Changan and Dongfeng are actively advancing global layouts. Faced with additional tariffs imposed by the EU on Chinese-made electric vehicles, domestic carmakers are prioritizing local production within the bloc to bypass trade barriers.