SAIC Motor-owned MG has selected Spain as the location for its first vehicle manufacturing plant in Europe, according to a Bloomberg report. The move marks a significant step toward local production after years of exporting vehicles to the region. According to information released by Spain’s Galicia regional government, the project will involve an initial investment of approximately €200 million ($229 million), with planned annual production capacity of 120,000 vehicles. The facility is expected to begin operations in 2028. In addition to the assembly plant, the project will include supporting logistics and industrial infrastructure. An MG sports utility vehicle The development has already been designated as a strategic project by local authorities, although it still requires final approval from Spain’s central government, including foreign investment clearance. Under current European Union trade measures, MG’s battery-electric vehicles exported from China face a combined tariff burden of up to 45.3% when entering the European market. Establishing local production is expected to help mitigate these costs. In fact, building a factory in Europe has long been part of MG’s strategic planning. As early as 2024, MG Europe executive William Wang stated that local manufacturing would become commercially viable once the brand’s annual sales in Europe reached around 300,000 units. MG ZS Data from Dataforce show that MG registered 307,282 vehicles in Europe in 2025, up 26% year-on-year, making it the best-selling Chinese automotive brand in the region. The compact SUV ZS alone contributed more than 120,000 sales, serving as the main volume driver of MG. Spain has been actively attracting investment from the new-energy vehicle sector in recent years. In addition to MG, Chery has restarted vehicle production at the former Nissan plant in Barcelona, while the cooperation project between Stellantis and Leapmotor is also progressing. MG S6 Compared with other popular investment destinations such as Hungary, Spain offers a well-established automotive manufacturing ecosystem, extensive port and logistics infrastructure, and a relatively abundant labor force, making it an increasingly attractive European production hub for Chinese automakers. For SAIC Motor, Europe remains one of its most important overseas markets. The company sold 349,000 vehicles in May. During the first five months of the year, SAIC’s overseas sales reached 589,000 units, up 45.9% year-on-year. Of that total, MG sold approximately 150,000 vehicles in Europe, up 20% from a year earlier, maintaining its position as the best-selling Chinese automotive brand in the region.