MG chooses Spain for first mainland European factory

MG has confirmed plans to establish its first production facility in mainland Europe, selecting Galicia in north-west Spain as the centrepiece of an ambitious localisation strategy that reflects the shifting geography of the automotive industry. The project targets an investment of approximately €200m ($233m) and is scheduled to begin production in 2028. At full capacity, the site is expected to build up to 120,000 vehicles annually while creating more than 2,000 jobs. According to regional authorities, construction could begin in 2027, subject to regulatory approvals.

The decision is significant as it returns SAIC-owned MG manufacturing to Europe, highlighting how Chinese-owned automotive groups are increasingly embedding themselves within European industrial ecosystems. As trade tensions, tariffs and localisation requirements reshape supply chains, manufacturing inside Europe is becoming a strategic necessity rather than a long-term aspiration.

More than a vehicle plant

MG says the facility will be designed as a fully integrated industrial ecosystem rather than a conventional assembly operation.

The carmaker stated that the site will combine vehicle research and development, advanced manufacturing, key component supply and intelligent logistics operations within a single connected operation. MG said the approach would strengthen local sourcing and improve the resilience and responsiveness of its European supply chain.

That breadth of activity is notable. While the relatively modest investment level of €200m may raise questions about the scale of manufacturing operations planned in the initial phase, MG is positioning the project as a strategic hub that extends beyond vehicle assembly alone.

The carmaker also intends to deepen collaboration with European technology partners, research institutions and local suppliers, with a particular focus on battery technologies, intelligent mobility systems and clean energy solutions.

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Localisation gathers pace

The announcement comes as several Chinese automakers accelerate their European manufacturing ambitions.

MG's parent company, SAIC Motor, has faced some of the highest EU tariffs on Chinese-built electric vehicles, increasing the commercial rationale for establishing production within Europe. Industry observers have long expected MG to follow rivals such as BYD, Chery and Leapmotor in securing a European manufacturing base.

The move also aligns with broader European policy objectives. As the EU works towards its 2035 zero-emissions targets, automakers are under increasing pressure not only to electrify their product portfolios but also to localise production and supply chains. Establishing a manufacturing base within Europe allows MG to position itself more closely to both regulatory requirements and customer demand as the region's transition towards electrified mobility accelerates.

Spain has emerged as a particularly attractive destination. The country combines an established automotive manufacturing workforce, extensive supplier networks, major port infrastructure and strong government support for industrial investment. Galicia's Ferrol region, where the project is expected to be located, offers direct maritime connections and a growing reputation as a logistics and industrial hub.

For Spain, the project reinforces its position as one of Europe's most active destinations for new automotive investment. For MG, it marks a decisive step in transforming itself from a Chinese exporter into a European manufacturer.

Building an automotive foothold in Europe

The factory forms part of MG's broader "In Europe, for Europe" strategy, which aims to bring production, engineering and innovation activities closer to European customers.

MG argues that the new facility will help bring advanced technologies into the European market through local manufacturing and development activities. The company has recently highlighted progress in areas including semi-solid-state battery technology alongside an expanding range of hybrid and plug-in hybrid powertrains, reflecting its ambition to play a larger role in Europe's evolving electrification landscape.

“From technological innovation to the localisation of manufacturing and R&D across Europe, supported by a truly global product line-up, MG continues to push the boundaries of what is possible—making advanced technology and sustainable mobility accessible to more people than ever before,” said William Wang, Managing Director, MG UK and Europe.

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The investment also comes as MG broadens its European product offering. Recent launches including the MG4 EV Urban, MGS5 EV, MGS6 EV and MGS9 Plug-in Hybrid reflect the company's push into key electric and electrified vehicle segments, while the Cyberster serves as a flagship technology platform showcasing the brand's EV capabilities. Expanding local manufacturing capacity alongside a growing model portfolio would give MG greater flexibility to align production and supply chains with European market demand.

The announcement also reflects the growing scale of MG's European operations. Since returning to the UK market in 2011, the brand has expanded across 34 European markets and now works with a dealer network of more than 1,300 partners. Parent company SAIC recently reported the delivery of its 100-millionth customer vehicle globally, underscoring the industrial scale underpinning MG's expansion strategy.

The investment follows a period of rapid growth for MG across Europe. Earlier this year, the company celebrated the delivery of its millionth vehicle in the region, underlining how quickly the brand has expanded from challenger status to a significant market player. The broader model range, combined with growing investment in European manufacturing, engineering and supply chain capabilities, signals a company seeking to establish a deeper and more permanent presence within the region.

Whether the Galicia operation evolves into a full-scale manufacturing complex or begins life with a stronger emphasis on local assembly and supply chain integration remains to be seen. What is already clear is that Europe's automotive map is being redrawn. As electrification targets, trade policy and supply chain resilience increasingly shape investment decisions, Chinese manufacturers are choosing to establish industrial roots within Europe rather than serve the market solely through exports. MG's Spanish project is one of the clearest signs yet of that shift.