Ford and Geely launch joint venture to produce vehicles at Valencia plant in Spain

Ford and Geely recently agreed to form a joint venture at Ford's manufacturing hub in Valencia, Spain, with Ford holding 66% of the new entity, and Geely Auto the remaining 34%. Pending regulatory approval, the venture is expected to begin operations in the first half of 2027, with new vehicles reaching the line in 2028.

Which models will be manufactured in Valencia?

Ford's Kuga, one of Europe's better-selling plug-in hybrids, will continue rolling off the Valencia line without interruption, providing a revenue base while the rest of the venture is built out.

Alongside it will arrive a new member of the Bronco family, reimagined as a compact, adventure-oriented SUV for European roads, and an all-new multi-energy crossover jointly developed by Ford and Geely, both due in 2028. Ford has described this as part of a wider offensive that will bring five new passenger vehicles to European showrooms by 2029.

Geely Auto, for its part, will use the same facility to build two electric SUVs under its own badge, the first of which are scheduled to reach the production line in 2028 too.

The arrangement extends a period of overseas momentum for the Chinese group, which reported overseas sales of 474,228 vehicles in the first half of the year.

"This partnership shows how automakers are strengthening Europe's industrial base, but we can't do it alone," said Jim Baumbick, president of Ford of Europe. "What we've achieved in Valencia, with the ongoing support of Spain's national and regional governments, is a masterclass in public-private partnership that sets the benchmark for the rest of Europe."

In Europe, for Europe

Ford has said that by pooling production volume, the two companies will maximise the capacity of the Valencia plant, lower the cost of every vehicle built there and compete at this emerging cost standard while delivering world-class multi-energy vehicles and strengthening the local Valencia economy in the process.

“This joint venture with Ford in Europe reflects our commitment to open, collaborative product development as part of our growth strategy, deepening our local presence and commitment to customers in Europe”, said Alex Nan, vice president of Geely Auto Group.

“We are dedicated to delivering vehicles that European customers will choose on merit: on industry leading features, on high-quality and on actively contributing to Europe’s green future," Nan added. "Put simply: we are building cars in Europe, for Europe, alongside a trusted partner.”

Trust built on an earlier transaction

The willingness of two OEMs to share a factory floor rests on a relationship that predates this agreement by more than a decade. Ford's decision to sell Volvo Cars to Geely in 2010 could easily have ended in acrimony had the brand faltered under its new owner.

Instead, Geely protected and revitalised it, and that outcome appears to have earned a measure of confidence that now extends to production sharing on Ford's own home turf in Europe. Both OEMs have pointed to shared commitments to quality, cost-efficient sourcing and continuous improvement as the foundation for the new arrangement.

What has each party to gain from the joint venture?

For China, the deal means circumventing regulatory hurdles put in place to prevent what Europe deemed “unfair competition”, barring China from saturating the European market with Chinese EVs that ‘Western’ OEMs are finding difficult to compete with.

For Ford, it means tapping into efficiencies that it is set on clearly benefiting from, and that, as a logical deduction, it lacks in its absence.

And for Valencia, the answer to an industry resetting its benchmarks has turned out to be an old rival with new capital and a shared production line.