"Producing in Europe costs twice as much": the CEO of this giant revealed why it will build two SUVs in Valencia using Chinese parts.

03/11/2026 12:00

Updated to

03/11/2026 14:48

Last July, there was surprising news that Geely would produce two new SUVs at Ford’s plant in Almussafes, Valencia; the question was clear: would the brand rely on Chinese workers? Geely firmly denied this, stating that its intention was to “preserve and respect local employment.”

While the production of up to two SUVs in Valencia—one developed jointly with Ford—may not affect jobs, the same cannot be said for the local economy. Geely Group’s CEO, An Cohghui, made it clear during a press meeting that the brand would turn to global suppliers, including Chinese parts manufacturers. The reason? Costs in Europe are twice as high, he explained.

"Costs in Europe are 70 to 100% higher," says Geely’s CEO

As reported by Economía Digital, Geely’s CEO was clear about Geely’s philosophy regarding local suppliers. While he left the door open to working with companies in Valencia and its surroundings, his idea is that it should be the Group’s Chinese and global suppliers who work with the brand at the Valencia plant.

He stated this during Geely’s third-quarter results conference when asked how they would ensure profitability by manufacturing abroad. In his response, Geely Group’s CEO explained that they support “large-scale specialized production. Under this framework [the Group] has its own strategic suppliers grouped together in what we call the ‘Geely Community,’ focusing on intelligence, AI, and traditional components,” he explained.

Geely’s CEO said that “these supply chains will also globalize alongside us; we are not going alone, we are accompanied by our supply chain partners, and we cooperate with local suppliers abroad.”

The situation with suppliers in Valencia will involve such “cooperation” from Geely, but the company will primarily source from its global and Chinese suppliers, as An Cohghui stated, because costs on the Old Continent can be twice as high as in China. Specifically, Geely’s CEO explained that “costs in Europe can be 70% to even 100% higher than in China,” before adding that “if we manage to connect the supply chains on both sides, costs can be controlled.”

But Economía Digital asked him directly what percentage of their SUVs would have parts manufactured in Valencia, to which Geely’s CEO refused to give a direct answer instead offering a somewhat clarifying response: “Geely remains committed to supporting its brands in serving their customers wherever they are, by meeting applicable local and regional requirements and adjusting our approach when necessary.”

Furthermore, Geely’s CEO delved deeper into the group’s philosophy of relying on global suppliers, explaining that “starting from 2024, we have advanced under the leadership of ‘One Geely’ [referring to all the group’s brands such as Geely, Volvo – whose CEO already states that China will not make Western brands profitable – Zeekr or Lynk & Co, Galaxy] by creating a unified procurement system that enables very deep integration of the resources from various brands.”