Ford and Geely Establish Joint Venture for Plant in Spanish Almussafes

Joint Venture with Majority Stake for Ford

According to Ford, the Almussafes plant has an annual capacity of around 500,000 vehicles and was once Ford's largest factory outside the US. However, according to industry reports, the facility is currently operating at less than a quarter of its capacity. Parts of the facility, including at least one assembly line, have been idle for some time. Currently, only the Ford Kuga model is built there. "The plant is on a downward trajectory; about ten years ago it had roughly twice as many employees," the report states. Around 4,000 people currently work for Ford in Valencia.

With the establishment of the joint venture, the plant and workforce will be assigned to the new company. The companies did not provide specific figures on secured or newly created jobs, speaking only of "potential for future growth of highly qualified jobs." Geely stated that the collaboration was intended to strengthen operational excellence and secure "long-term stability and employment opportunities for the first-class automotive workforce in Valencia."

Plant Utilization and Employment

Ford plans two new models in addition to the Ford Kuga: a European variant of the Ford Bronco off-roader as well as a new crossover SUV. In addition, Ford and Geely intend to jointly develop a "crossover" hybrid model based on Geely's platform, which is to launch as a Ford vehicle in 2028. Ford is announcing a "product offensive" with five new multi-energy passenger cars for Europe by 2029 in this context. "Production of the new models is then to be ramped up in 2028 parallel to the ongoing production of the Ford Kuga."

From 2028, five vehicle models from both brands are to be built there for the European market as part of a joint venture, "producing a new generation of low-emission and zero-emission vehicles for the European market," as stated in the joint declaration. The cooperation covers "multi-energy vehicles," meaning electric cars, plug-in hybrids, and range-extender vehicles. Geely, in turn, wants to manufacture two electric off-roaders in Valencia, which would mark the Chinese company's first production in Spain.

Vehicle Range Through 2029

According to Geely Senior Vice President Victor Yang, the first model is the EX5, which is already sold in Europe. The second vehicle is still under development. Three Ford models and two electric models from the Geely brand are planned, including, according to the report, the EX2 model. The companies have not yet disclosed which specific platform the jointly developed crossover will be based on. According to Reuters, the crossover is to be jointly developed by Ford and Geely and offered in several powertrain variants – battery-electric (BEV), plug-in hybrid (PHEV), and extended-range electric vehicle with range extender.

The division of business areas is clearly defined: both groups cooperate on the production and development of the crossover model, while they go separate ways in sales and brand management. "The automaker Ford plans a collaboration with the Chinese Volvo Cars parent company Geely to better utilize its Valencia plant and reduce costs." "Ford, in turn, can reduce fixed costs through the shared use of the factory infrastructure," the report continues.

"Together, we can fully utilize a first-class plant with outstanding employees and meet the new cost benchmark of the industry," said Jim Baumbick, head of Ford Europe. "This partnership shows how automakers can strengthen Europe's industrial base, but we cannot do this alone," he added. Baumbick also rejected concerns that the Valencia cooperation would have implications for the Cologne location. He described the electric models produced in Cologne as "a crucial part of our portfolio."

Market Position and Competition in Europe

However, Ford is under pressure in Europe: in the first half of the year, around 192,000 new Ford cars were registered in Europe, roughly 35,000 fewer than in the same period the previous year. According to the European Automobile Manufacturers' Association (ACEA), Ford's market share stood at 2.7 percent, 0.6 percentage points lower than a year earlier. This puts Ford behind Geely, which in the first half of 2026 achieved a market share of 3.1 percent and recorded around 225,000 new car registrations in Europe – 0.1 percentage points more than in the same period the previous year. In the group ranking, Geely comes in 8th place in Europe, behind Mercedes.

With BYD, another Chinese automaker sits in the ranking directly behind Ford; that company, too, is selling significantly more vehicles in Europe than before. "Chinese automakers are deepening their push into Europe by leveraging excess capacity of international brands," the report states. Geely has already entered partnerships with other foreign manufacturers such as Renault to gain faster access to foreign markets.

Geely's Entry into the EU Market

For Geely, the agreement means more than just an additional location: the joint venture gives the Chinese group its own production facility within the EU for the first time. "The Chinese group wants to accelerate its expansion in Europe through the collaboration." This gives the group direct access to the European market and the ability to circumvent potential EU tariffs on electric vehicles imported from China – vehicles from the Almussafes plant are considered EU-produced.

"The move reflects the urgency for Chinese automakers to seek growth outside the crowded domestic market," said an auto analyst at Macquarie Capital. "Build cars in Europe for Europe, together with a trusted partner," explained Alex Nan, Vice President of Geely Auto Group, regarding the commitment.

Geely is also known for the small car Smart, which is owned half each by Geely and Mercedes. Among others, the brands known in Europe belonging to Geely include Volvo, Polestar, and Lotus. Geely announced the partnership on Thursday in a statement.

Outlook for the Cologne Location

While the future of the Valencia plant is being put on a new footing with the joint venture, the situation at the Cologne location remains tense: at the end of the previous decade, there were still around 20,000 employees there. By 2027, Ford could have fewer than 8,000 employees in Cologne. Ford's European business is under pressure, and the Cologne electric models Explorer and Capri are selling overall below expectations. Ford's US parent has invested billions in the Cologne plant to prepare it for the electric car era.

"Ford sells part of plant to Chinese rival Geely," was the original report. With the move, Geely secures a production base within the European Union and Ford simultaneously gains an allied partner to reduce its fixed costs. Both sides present the deal as an industrial policy signal: "This partnership shows how automakers can strengthen Europe's industrial base."