Spain Emerges as Key Hub for Chinese Auto Manufacturing and Supply Chain in Europe

In 2025, Spain’s resident population exceeded 49.3 million, with passenger car sales reaching 1.15 million units—a year-on-year increase of 12.9%. The country had approximately 31.71 million motor vehicles in circulation, including 26.9 million passenger cars, equating to 544 vehicles per 1,000 people. Although Spain ranks as a second-tier automotive market in Europe by size, its vehicle manufacturing capabilities are notable: total automobile production reached 2.27 million units in 2025, of which 1.96 million were exported—representing an export share of 86.1%. Key export destinations included Germany, France, the UK, and Turkey. The Spanish market is characterized by price sensitivity and strong demand for practicality and family-friendly features. In 2025, the best-selling models were the Dacia Sandero (38,548 units), Renault Clio (27,104 units), and MG ZS (23,731 units). Chinese brand MG entered the mainstream segment thanks to its value-for-money proposition, with the ZS securing its position as Spain’s top-selling SUV for the second consecutive year. BYD registered 25,552 vehicles in 2025, a surge of 373.7% year-on-year, with its SEAL U DM-i plug-in hybrid model leading the PHEV segment at 9,373 units sold. Electrification is accelerating rapidly: combined battery electric vehicle (BEV) and plug-in hybrid electric vehicle (PHEV) sales totaled 225,616 units in 2025, up 94.6% year-on-year and accounting for 19.6% of the overall market. Meanwhile, conventional hybrid vehicle sales surpassed 480,000 units, reflecting consumers’ gradual, step-by-step adoption of new energy technologies. On the policy front, the Spanish government extended the MOVES III vehicle purchase subsidy program through the end of 2025, offering individuals up to €7,000 for buying an electric vehicle. It also accelerated public charging infrastructure deployment, bringing the total number of public charging points to 53,072 by year-end. On the industrial side, initiatives such as PERTE VEC and the “Plan España Auto 2030” aim to mobilize €35–40 billion in public-private investment over five years, focusing on vehicle manufacturing, battery gigafactories, component upgrades, and strengthening local supply chains. Spain hosts a mature automotive manufacturing network, with production facilities operated by global automakers including Volkswagen/SEAT, Stellantis, Ford, Renault, and Mercedes-Benz. These are concentrated in three major manufacturing clusters: northeastern Spain (Catalonia–Basque Country), northwestern Spain (Vigo cluster), and eastern Spain (Valencia). The domestic auto parts ecosystem is well-developed, featuring leading suppliers such as Gestamp, CIE Automotive, Antolin, and Ficosa. Manufacturing is actively transitioning toward electrification: in 2025, production of electrified vehicles (BEVs, PHEVs, and hybrids) reached 225,206 units, or 9.9% of total output. Vehicles powered by alternative drivetrains—including hybrids—totaled 891,290 units, representing 39.2% of overall production. Chinese enterprises have made significant strides in establishing both vehicle production and supply chain operations in Spain. SAIC Motor’s MG brand achieved a major sales breakthrough; BYD rapidly scaled up volumes through its plug-in hybrid offerings; and Chery partnered with Spanish firm Ebro to produce S700/S800 models—based on the Tiggo platform—at the former Nissan plant in Barcelona’s Zona Franca. The project targets annual production of 50,000 units by 2027 and 150,000 units by 2029, while restoring approximately 1,250 jobs. Additionally, CATL and Stellantis are jointly building a battery plant in Figueruelas with a total investment of around €4.1 billion and a planned capacity of 50 GWh, expected to commence operations by the end of 2026. Spain is evolving from a purely import-oriented market into a strategic European hub for Chinese automakers—one that integrates manufacturing, exports, and deep supply chain integration.