Chinese luxury brand Hongqi - historically associated with state dignitaries - is discussing the possibility of manufacturing cars at one of Stellantis’ Spanish facilities as part of a broader push into Europe, five people familiar with the matter said.
The negotiations are being conducted by Hongqi's owner, state-controlled FAW, through Chinese electric-vehicle maker Leapmotor, according to two sources. Both FAW and Stellantis hold investments in Leapmotor, the sources added.
Those involved view contract assembly as a faster route for Hongqi to establish a European production base and to expand its model range in the region. One source with direct knowledge of the talks described the approach as a way for Hongqi to begin producing in Europe quickly, noting that the company is leveraging Leapmotor’s relationships to secure a manufacturing foothold via Stellantis.
"This was the way that Hongqi can start European production quickly," the source said. "Hongqi is using that network to gain a manufacturing base through Leapmotor and Stellantis."
Representatives for Hongqi, FAW and Leapmotor did not immediately respond to requests for comment. A Stellantis spokesperson declined to comment on Reuters’ specific findings but said that the company routinely holds discussions with a range of industry players worldwide with the objective of providing customers with the best mobility choices.
The talks are ongoing and could yet fail to produce a deal, the sources cautioned.
Strategic context and planned roll-out
Hongqi, whose name means "red flag," is among several Chinese automakers aiming to broaden their footprint outside China. The company has set ambitious targets, including selling 1 million vehicles annually by 2030, with at least 10% of those sales originating outside the domestic market, one of the sources said.
Production in Spain would represent Hongqi’s first manufacturing presence in western Europe. The company has also explored Hong Kong as a potential production location, a choice that could face fewer export tariffs than production in mainland China, but no final decision has been reached, a source said.
Leapmotor and Hongqi agreed last year for Leapmotor to provide an EV platform to Hongqi. That technology deal is intended to support Hongqi’s overseas expansion after decades of focusing largely on sedans for government leaders. Hongqi publicly stated last year that it plans to introduce 15 electric and hybrid models in Europe by 2028 across 25 markets, and it has showcased the EHS5, a compact electric SUV.
Industrial partnerships and Zaragoza production
Stellantis already sells Leapmotor-branded models outside China and will begin manufacturing vehicles for the EV start-up at its Zaragoza plant later this year. Two of the sources said that Hongqi vehicles would also be assembled at the Zaragoza factory under the contemplated arrangement.
The same sources indicated that Stellantis and Leapmotor are in advanced talks over a joint development of an Opel-branded electric SUV that would use Leapmotor technology and be produced at Zaragoza.
While the potential deal could accelerate Hongqi’s entry into European production and expand model availability without the capital outlay of a greenfield factory, the discussion remains preliminary and subject to change.