D nears decision on second factory site in Europe

According to Alfredo Altavilla, the automaker’s Special Advisor for Europe, D is very close to a decision to purchase an existing automotive facility in Europe; Spain and France have been identified as leading candidates for brownfield investment, according to the automaker’s Special Advisor for Europe, Alfredo Altavilla. “This week, we have two teams investigating in different jurisdictions, so we are close,” Altavilla said at the Reuters Automotive Europe conference in Frankfurt on July 1, adding that the call “should be made very soon.” This acquisition will be D’s second passenger vehicle production facility in Europe, after the Szeged plant in Hungary, where equipment installation is currently ongoing and series production is expected in the fourth quarter of 2026. The facility, which was previously secondary to D’s European plans (a facility in Türkiye where D has announced a US$1 billion investment plan), will remain on hold with no timeline for completion. Deputy Chief Executive Officer Stella Li confirmed that Hungary is an immediate priority. The Turkish pause is less a project failure than a strategic recalibration following the EU’s proposed ‘Made in the EU’ rules. The site’s original advantages – bypassing the 27% countervailing duties imposed on Chinese-made battery electric vehicles – are shared with other sites in Europe that would comply with these proposed rules. It is not yet known whether Türkiye will eventually be included in this plan. D did not disclose which specific sites were under evaluation, but the landscape of existing sites is shaping up to be a small part of European producers’ unresolved capacity issues. Stellantis, in particular, has led a slump in Italian vehicle production, falling to a 70-year low of 390,000 units in 2025, with production at its Cassino plant in Lazio seeing production fall by more than 37% in early 2026. D had previously confirmed talks with Stellantis about the acquisition of underutilized facilities, with Italy as a priority as well as France. Stellantis’ existing joint ventures with Dongfeng and Leapmotor at sites in Spain and France demonstrate its clear desire to open its production network to Chinese partners. It’s worth noting that this model extends well beyond the D: Xpeng is in talks with Volkswagen and other European automakers about buying factories, bypassing the contract manufacturing arrangement at Magna Steyr’s Graz factory; Volkswagen said it was exploring whether its Chinese partners could absorb excess capacity on the network, which it is trying to reduce from about 12 million units a year to nine million. “It is absolutely useless to fight this invasion,” Altavilla said of China’s broader advances into Europe. D’s sales trajectory in Europe places emphasis on urgency. Volumes in Europe are up 270% to nearly 188,000 vehicles in 2025, and have more than doubled again to over 100,000 in the first five months of this year; This put D on track to exceed the previous full year total well before December. Altavilla’s remarks that German plants are uncompetitive, citing cost as well as underutilization, point to Southern Europe, where energy costs are lower and labor markets are more flexible, as the preferred destination. D’s experience in Brazil, where its acquisition of a former Ford factory in Camaçari led directly to market leadership, probably offers the clearest template for what it is trying to copy. A brownfield purchase in southern Europe would provide D with a manufacturing asset capable of meeting the ‘Made in the EU’ requirement, protecting it from both tariff risk and future subsidy exclusion, while also absorbing capacity that host country governments are currently under political pressure to keep in use. Altavilla also called the ongoing European build-up “the first real wake-up call” and suggested that D’s advisers saw the window for these deals as narrow. If the D doesn’t act quickly to ensure one of the brownfield areas becomes available quickly, another Chinese player may be willing to step in before then.

Information: This content was prepared and published using AutomobileMagazine’s artificial intelligence-supported publishing system, in line with the information shared by international automotive manufacturers and reliable press sources.