Chinese carmaker Chery says Spain to be among its main exporting plants

By Joan Faus

BARCELONA (Reuters) -Chinese carmaker Chery said on Friday its newly-acquired Barcelona plant will be one of its main exporting facilities worldwide, aiming to produce 150,000 vehicles a year by 2029 as part of a joint venture with Spanish firm EV Motors.

Production will begin at the end of the summer at the plant, Chery's first in Europe, and the carmakers will initially hire 150 former Nissan workers, who are currently on a training program financed by authorities after the Japanese firm divested in 2021.

The venture ultimately intends to hire up to 1,250 workers.

"Once we reach enough (production) scale, we will plan exporting to the rest of Europe and other countries, turning it into one of Chery's main exporting facilities worldwide," said Chery's Executive Vice-President Guibing Zhang during a presentation by the joint venture at the facility, which was partly handed to EV Motors after Nissan's exit.

Electric carmakers worldwide are waging an aggressive price war to win market share and the European Union is investigating whether Chinese EV makers benefit from unfair government subsidies.

Chery and EV Motors will invest around 400 million euros ($426.64 million) in the plant, Spain's Prime Minister Pedro Sanchez said at the same event.

Sanchez said such investments showed that Spain is becoming a large EV hub for Europe after it launched a 5 billion-euro plan in 2020 to attract production using European Union pandemic relief funds.

This year, Chery will manufacture its SUV Omoda 5 model, both in its EV and combustion engine versions, in Barcelona and will later also produce its Jaecoo 7 model there.

Using a shared production platform and technology with Chery, EV Motors will relaunch the Spanish brand EBRO, which ceased sales in 1987.

EV Motors will begin manufacturing two SUV models in plug-in-hybrid and combustion versions in the fourth quarter.

They will also apply for public funding, EV Motors said in a statement.

Authorities in Catalonia, the region of which Barcelona is the capital, said earlier this week they would help with financing for the project, but did not elaborate.

The two carmakers could also request funds from Spain's central government, which has 1.7 billion euros available this year under the pandemic relief program.

($1 = 0.9376 euros)

(Reporting by Joan Faus; editing by Charlie Devereux)