BYD and other Chinese automotive giants are expanding their presence in Europe by taking advantage of the continent’s underused car factories, as struggling European manufacturers seek ways to cut costs and avoid plant closures.
Once feared as a future threat flooding European markets with cheap electric vehicles, Chinese carmakers are now being welcomed into European production networks. With demand weakening and assembly lines running far below capacity, major European groups are increasingly willing to lease or share factories with Chinese competitors in order to keep operations financially viable.
Companies such as Stellantis, which owns brands including Peugeot, Fiat, and Vauxhall, are at the centre of this shift, offering spare production capacity across Europe to Chinese firms. Similar arrangements are emerging across the continent, including partnerships involving Dongfeng-linked ventures in France and Leapmotor production in Spain, as well as discussions involving other major manufacturers.
The strategy allows Chinese firms to manufacture vehicles inside the European Union, helping them bypass tariffs and qualify for “Made in Europe” status while gaining access to established supply chains, skilled labour, and regulatory frameworks. Industry analysts warn that this could amount to a gradual transfer of industrial capability from European to Chinese control.
Executives and consultants say the trend is being driven by structural overcapacity in Europe’s automotive sector, with some factories operating hundreds of thousands of units below profitable levels. Without new partners, companies face the politically sensitive options of closure or massive job cuts.
Chinese manufacturers, including BYD, Geely, Chery, Dongfeng, and Leapmotor, are using joint ventures, factory-sharing agreements, and in some cases direct investment to accelerate their expansion. BYD is also building its own production facility in Hungary while continuing to explore additional manufacturing partnerships across the continent.
Supporters of the arrangements argue they offer a pragmatic solution: keeping European factories open, preserving jobs, and reducing costs by tapping into Chinese supply chains. Critics, however, warn that the deals could leave European carmakers increasingly dependent on Chinese technology and production systems while eroding long-term industrial sovereignty.
Policy experts suggest that the European Union could impose stricter conditions on such partnerships, including requirements for local value creation and technology transfer, to prevent an unbalanced shift in industrial power. New EU rules aimed at boosting European content in electric vehicles may unintentionally be accelerating the trend by encouraging foreign manufacturers to establish production inside Europe.
While European automakers frame these deals as short-term survival strategies, analysts caution that they may mark the beginning of a deeper structural shift in which Chinese firms gain a lasting foothold in Europe’s automotive sector, potentially redefining who controls the continent’s car industry.
