Chery’s Ambitious European Strategy

Chery, currently teh fourth largest automotive manufacturer in China, is reportedly in advanced discussions to acquire two Volkswagen factories, signaling a important escalation in its European market strategy. This move comes as Chery seeks to establish a stronger foothold in Europe, leveraging existing infrastructure to accelerate its production capabilities.

Volkswagen’s Restructuring and Potential divestment

Volkswagen, facing considerable economic pressures, is exploring strategic options to streamline its operations. Sources close to the matter suggest that the potential sale of the Osnabrück and Dresden production facilities is under consideration as part of a broader restructuring effort. These plants, while historically significant, have reportedly struggled with profitability, prompting Volkswagen to seek alternative solutions.

Auto news, referring to information from near -sources of Volkswagen, says the German automotive giant is looking for a way out of the heavy crisis. These sources claim that one of the solutions is the closure of the unprofitable factories, thinking about the production facilities in Osnabrik and Dresden.

Chery’s Production Plans: Lepa Crossovers and More

Insiders suggest that Chery intends to utilize at least one of the acquired factories to assemble vehicles under its newly launched Lepa crossover brand. The initial offering is expected to be a rebadged version of the Chery Tiggo 8 Plus. The broader European lineup will encompass two compact and one medium-sized crossover, featuring a range of powertrain options, including internal combustion engines, plug-in hybrids, and fully electric models. this diversified approach aligns with the growing demand for electric vehicles in Europe, where EV sales continue to rise, accounting for approximately 15% of new car registrations in the first quarter of 2025, according to recent industry data.

Challenges and Considerations in the German Automotive Landscape

While Chery has confirmed its intention to expand production in Europe, the acquisition of German factories presents several challenges. The situation in germany is very difficult, notes Chery International Vice President Charlie Jean, highlighting the complexities associated with German production standards, stringent trade union requirements, intricate supply chains, and precise cost calculations. Successfully navigating these factors will be crucial for chery’s long-term success in the European market.

Chery International Vice President Charlie Jean does not hide that the company is actively negotiating with the European company on the acquisition of local factories, but experts beleive that the agreement will not be easy because “the situation in Germany is very difficult”, and the production standards, trade union requirements, supply chains and cost calculations must be taken into account.

Strategic Partnerships and Existing European Ventures

Chery has already established a presence in Europe through a joint venture with the Spanish brand EBRO. This partnership involves the revitalization of the former Nissan plant in Barcelona, where production has commenced to mitigate high import tariffs. In the near future, the facility will begin producing Tiggo hybrid vehicles, as well as electric models under the Icoda and Jaecoo brands. This strategic alliance demonstrates Chery’s commitment to building a robust and diversified European manufacturing base.

Rheinmetall’s Interest and the Future of osnabrück

Notably, the Osnabrück plant has also attracted interest from Rheinmetall, a prominent manufacturer of military machinery. This potential alternative use for the facility underscores the diverse industrial landscape of Germany and the potential for repurposing automotive manufacturing sites.