Made in Europe: how MG wants to dodge EU tariffs through Spain

SAIC's plan to build an MG car plant in Galicia is closing in on strategic project status. Two sites near Ferrol, output of 120,000 cars a year and the MG2 hatchback on the table.

Galicia could become the next industrial foothold for MG in Europe. According to Spanish media, Chinese group SAIC’s project to build a car plant in the region is close to being granted strategic industrial project status. That step does not guarantee the final go-ahead, but it shows the talks have already moved far enough along.

For MG, a European plant is not just a logistics question. Chinese-made electric cars face protective tariffs in the EU, and local assembly helps cut that risk. If the cars are produced inside Europe, the brand gets more pricing freedom and can compete harder with Renault, Stellantis, Volkswagen and the rest of the local field.

Two sites are on the table — Ferrol and As Pontes. They are about 40 km apart and linked by motorway. Planned output is 120,000 cars a year. That is not a huge volume, but for MG’s first European plant it looks reasonable: enough to serve demand without piling on risk.

Strategic project status should roughly halve the administrative timeline. It also opens the door to subsidised financing and direct allocation of land owned by the autonomous community. For a carmaker that matters a lot: factories often lose out not over money but over endless approvals.

The choice of Galicia is also tied to its existing automotive base. The region has a developed supplier network that grew up around the Stellantis plant in Vigo. For SAIC that means less uncertainty: skilled workers, contractors, logistics and serial production know-how are already there. The political weight behind the talks is just as visible.

Galicia’s president Alfonso Rueda recently travelled to China together with María Jesús Lorenzana, the regional minister for economy and industry. There he met SAIC chairman Wang Xiaoqiu, toured the group’s facilities and even drove a Roewe on the test track — the brand that became the heir to Britain’s Rover.

There are tricky details too. The project may require changes inside the port of Ferrol. In particular, that means possibly relocating Windwaves, which builds structures for floating wind farms and currently occupies a plot of around 8 hectares. Issues like this often turn into the real test for big industrial plans.

The first model from the new plant could be the MG2 — a future electric hatchback of around four metres. It is being prepared as a European car and a potential Renault 5 rival. If the model really is being designed for European tastes and rules, then producing it in the local market starts to look all but inevitable.

Spain has already become one of the main destinations for Chinese investment in the automotive sector. CATL, Chery and Leapmotor have announced major projects, and Geely, according to local media, is in talks over part of Ford’s Almussafes plant. The reasons are clear: lower costs, a growing share of renewable energy and direct access to the EU market.

Local assembly of MG in Spain could bring down prices and shorten delivery times for its electric models.

If SAIC settles on Galicia, it will not just be a win for the region. It will be another sign that Chinese brands no longer want to be only importers in Europe. They are starting to build plants here to play the market for the long haul and on tougher terms.