Geely, Ford form car-making joint venture in Spain

Geely Automobile Holdings Ltd. (0175.HK) announced on Thursday that it agreed to buy 34% of U.S. auto giant Ford’s (F.US) Spanish operation for 221 million euros ($251 million). Following the deal, Geely and Ford will operate Ford Espana as a China-U.S. joint venture, with Geely holding 34% and Ford continuing to hold the remaining 66%.

After the deal’s completion, the joint venture will engage in contract manufacturing of passenger vehicles at its facilities in Spain’s Valencia region. The venture will not have its own independent sales functions and will not undertake product design.

Ford Espana earned a net profit after taxes of 69.8 million euros last year, down from 236.3 million euros in 2024. Geely said the purchase will allow it to manufacture vehicles in Europe for sale to the European market, avoiding import duties. It will be able to immediately benefit from Ford Espana’s existing workforce, supply chains and other resources.

The move comes as Chinese automakers boost their exports to offset slowing sales in their home market. But those exports are meeting with resistance in some Western markets, especially new energy vehicles (NEVs) that have become a key focus for many Chinese companies. The two joint venture partners have a relationship dating back to 2010, when Geely bought the Volvo car brand from Ford for $1.8 billion.

Geely shares rose 3.3% on Thursday before the announcement. The stock is up 3.2% this year.

By Doug Young

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