Chinese automakers are "bottom-fishing" for factories overseas

On May 31st, XPeng Motors' acquisition of a 90.1% stake in EIDO, an electric vehicle manufacturing entity under the Indonesian listed company PT Sinar Eka Selaras Tbk, officially took effect.

The most core asset of this acquisition is the electric vehicle production and assembly plant located in Purwakarta, West Java, Indonesia.

This means that XPeng Motors has its first overseas factory.

It's not just XPeng.

Since the beginning of this year, Chinese automakers have been continuously "buying the dip" in overseas factories, becoming the most eye - catching phenomenon in the global automotive industry.

The "script" of the global automotive industry has changed!

01 "Buying the Dip" in Overseas Factories

As early as 2004, SAIC Group spent approximately $500 million to acquire a 48.92% stake in South Korea's SsangYong Motor. In 2005, it increased its stake to achieve absolute control and obtained the other party's vehicle manufacturing plant and R & D facilities.

This was the first cross - border acquisition by a Chinese automaker.

A pure factory acquisition case might be the acquisition of the civilian factory in Indiana of the US AM General by Chongqing Xiaokang (Seres) in 2017.

At that time, SF Motors under Xiaokang acquired the civilian factory in Indiana of the US AM General for $110 million, retained about 430 employees, and planned to invest hundreds of millions of dollars to transform it into an intelligent electric vehicle base. It planned to put into production high - end electric SUVs SF5 and SF7, with the goal of delivering in North America in 2019.

Regrettably, due to changes in the market environment, Xiaokang suspended its new car plan in the US and finally sold the factory in 2024.

In 2020, Great Wall Motors spent 4.72 billion yuan ($22.6 billion Thai baht) to acquire General Motors' manufacturing plant in Rayong, Thailand, including a vehicle manufacturing plant and a powertrain plant.

After the handover, Great Wall added approximately 5 billion yuan ($12 billion Thai baht) for the intelligent transformation and upgrading of the factory.

On January 12th, 2024, the Ora Good Cat of Great Wall Motors was officially mass - produced and rolled off the production line at the Rayong factory.

The Ora Good Cat of Great Wall Motors was officially mass - produced and rolled off the production line at the Rayong factory

In 2023, BYD acquired the former Ford Motor's production base in Camacari, Bahia State.

The first vehicle rolled off the production line at this factory in July 2025, and the cumulative number of vehicles rolling off the production line exceeded 50,000 in May 2026.

Since the beginning of this year, there have been even more news about Chinese automakers acquiring overseas factories.

On May 6th, Geely Automobile reached an agreement with Ford Motor to acquire the "Body 3" body assembly line of Ford's factory in Almussafes, Valencia, Spain.

On May 13th, Li Ke, the executive vice - president of BYD, publicly confirmed that the company is in talks with European automakers such as Stellantis Group and plans to take over idle or under - utilized factories in Europe.

On May 14th, some media reported that XPeng Motors is in talks with its shareholder Volkswagen Group and may acquire a factory in Europe to expand its sales in Europe.

On May 20th, Stellantis Group issued a statement saying that it is discussing with Dongfeng Group the possibility of locally producing Dongfeng Group's new - energy vehicle models at its factory in Rennes, France.

Dongfeng Motor and Stellantis Group signed a memorandum of understanding. The two parties plan to establish a joint venture in Europe and plan to directly produce electric vehicles of Dongfeng's high - end new - energy brand VOYAH at Stellantis Group's factory in Rennes, France.

BYD's production base in Camacari, Bahia State

This is actually a disguised form of acquiring an overseas factory.

02 A Cost - Effective Choice

Chinese automakers' acquisition of overseas factories presents two distinct characteristics.

One is precise layout, focusing on the three major markets of Europe, South America, and Southeast Asia.

The other is an accelerating pace. In recent years, the pace has significantly accelerated, showing a strong expansion momentum.

Why are Chinese automakers keen on acquiring overseas factories?

A major background is the rise of global trade protectionism.

Countries and regions such as the EU, Brazil, and India impose high tariffs on imported cars.

Through local production, tariffs can be exempted, costs can be saved, and product competitiveness can be greatly improved.

There are three common paths for Chinese automakers to achieve local production overseas.

One is KD assembly, which involves disassembling the whole vehicle into parts/components for export and assembling them into a whole vehicle in the target market. It is an entry - level choice for localization.

One is contract manufacturing, which involves entrusting an overseas mature factory to produce self - owned brand models without directly investing in the factory.

Magna's Graz factory in Austria manufactures vehicles for XPeng Motors

The other is to produce in its own factory.

Considering factors such as trade barriers, cost structure, and market response, laying out self - owned factories has become an inevitable choice.

Under this general logic, compared with building a factory from scratch, acquiring a factory has several advantages.

Do the math. The price of acquiring an overseas factory is much lower than the cost of building a new one.

Take the Ford factory in Brazil taken over by BYD as an example. The acquisition price is only 1/4 of the cost of building a new factory of the same scale, which significantly reduces BYD's cost of expanding production capacity in Latin America.

This cost advantage allows Chinese automakers to quickly obtain a global production capacity layout with lower investment and improve the efficiency of capital use.

The time cost should not be underestimated either.

Building a new overseas factory from approval, infrastructure construction, production line setup to production takes at least 3 - 5 years. After acquiring an existing factory, the transformation period only takes 6 - 16 months, which can bring forward production by 2 - 3 years, seize the market window, and gain a first - mover advantage.

For example, Great Wall's factory in Thailand completed the handover in November 2020 and was officially put into production in June 2021. It only took about 7 months from handover to production.

In addition, acquiring a factory can obtain ready - made production qualifications, supply chains, and skilled workers, saving the cumbersome processes of applying for qualifications, recruiting and training personnel, and building supply chains, and achieving a "move - in - ready" type of global expansion.

From the local perspective, Chinese automakers' acquisition of overseas factories not only allows old production capacity to regain value but also guarantees the livelihoods of local people.

SAIC - GM - Wuling's factory in Indonesia

This approach that takes into account both industrial development and people's livelihood and employment achieves mutual benefit and win - win results, laying a good foundation for enterprises to take root in overseas markets in the long term.

Of course, Chinese automakers' "buying the dip" in overseas factories is not without risks.

Some factories have hidden costs such as legacy debts and over - budget production line transformation costs. Some also need to deal with issues such as local adaptation and union coordination...

Overall, acquiring overseas factories is still a cost - effective choice for Chinese automakers in the process of globalization.

03 The "Script" Has Changed

In 2025, China's automobile export volume reached 7.098 million vehicles, a year - on - year increase of 21.1%, ranking first in the world for three consecutive years. Among them, the export volume of new - energy vehicles was 2.615 million vehicles, a year - on - year surge of 100%, becoming the core engine driving growth.

Since the beginning of 2026, this momentum has been even stronger. In the first four months, the cumulative export volume was 3.127 million vehicles, a year - on - year increase of 61.5%.

The explosive growth of China's automobile exports is by no means accidental.

In 2023, China surpassed Japan for the first time to become the world's largest automobile exporter. In 2024, it consolidated its advantage. In 2025, it reached a new high. In 2026, it is expected to hit the 10 - million - vehicle mark.

The core driving force behind this growth is the global production capacity network that Chinese automakers are accelerating to layout.

In the past, Chinese automakers mainly relied on whole - vehicle exports when going global, facing the triple pressures of high tariffs, logistics costs, and trade barriers.

Now, achieving local production through the acquisition of overseas factories has become the key to breaking the situation.

In April this year, BYD sold 14,911 vehicles in Brazil, with a market share of 12.8%, successfully surpassing brands such as Volkswagen and Fiat to top the list of Brazil's automobile retail sales.

Brazil's automobile sales list in April 2026

BYD's achievement of the first place in Brazil is largely due to the factory it acquired three years ago.

The plan for this factory in 2026 is to produce 150,000 vehicles, and the long - term total production capacity target is 600,000 vehicles per year.

BYD has laid out 6 overseas factories like the one in Camacari, Bahia State, Brazil, covering the four major markets of Southeast Asia, South America, Central Asia, and Europe.

Decades ago, world automotive giants opened factories in China.

Now, Chinese automakers are opening factories around the world.

The "script" of the global automotive industry has changed!

This article is from the WeChat official account "Zhengjieju" (ID: zhengjieclub), author: Zhengjieju. It is published by 36Kr with authorization.