A Chinese state carmaker is building its first European plant next to a NATO naval base
Jobs on one side of the scale, a spy warning on the other, and Spain has picked
China's carmakers have spent two years promising to build in Europe rather than just ship into it. Now one of the biggest is about to do exactly that, and the location is raising eyebrows well beyond the car industry. State-owned SAIC, the group behind MG, is set to build its first European factory in Galicia, in northwest Spain, roughly five kilometres from a naval base that services NATO warships. Spain's own intelligence services flagged the risk. The government is going ahead anyway.
The plant, in numbers
SAIC plans to invest 200 million euros in the Galicia site, its first vehicle plant in Europe. Construction is due to start in 2027, with production of MG-branded electric and hybrid models from 2028, an annual capacity of up to 120,000 cars, and around 1,000 local jobs. It is a serious commitment to building on European soil rather than importing, and a direct answer to the EU's tariffs on Chinese-made electric cars, which make local production far more attractive than shipping vehicles in from China.
Why the location is sensitive
The concern is not the cars, it is the address. The chosen site sits about five kilometres from Ferrol, a key port for the Spanish navy and a maintenance base for the F-100 frigates that take part in NATO missions. According to reporting on internal intelligence assessments, Spanish services warned of a risk of espionage, with officials worried that a plant operated by a Chinese state-owned company could gather sensitive information about the navy's routine movements. When the landlord next door is a Chinese state enterprise and the tenant is NATO's Atlantic fleet, someone was always going to ask questions.
The government's answer
The politics have come down firmly on the side of investment. Spain's defence ministry, which has been in talks with SAIC for months, said it had no concern regarding security, and Defence Minister Margarita Robles personally assured Galicia's regional leader that she would back the project when it reached cabinet. For a region that needs the jobs, and a country keen to attract green-industry investment, 200 million euros and a new factory are a powerful argument, and the government has clearly decided the security worry is manageable.
AutoNext Take
This is the dilemma Europe has been avoiding, now made concrete. The continent told Chinese carmakers to stop dumping imports and start building here, and SAIC is doing precisely that. You cannot demand local factories and then act shocked when a Chinese state company wants to pour concrete near your coastline. If the espionage risk is genuine, the honest response is a different plot of land, not a blanket no, and reports suggest the intelligence services raised exactly that kind of practical flag rather than opposing the plant outright.
Still, the speed with which the defence ministry waved away its own agencies is striking, and it sets a precedent the rest of Europe will study closely. Every government chasing Chinese investment now has a live example of how far a country will bend for the jobs, base next door or not. The cars themselves are not the story here. The story is that Europe wants Chinese factories and Chinese money without the strings that come attached, and Ferrol is where that contradiction stops being theoretical.
