China's Baic, Dongfeng's Spanish partner to push local supply

Santana Motors, a Spanish carmaker partnered with China’s Dongfeng Motor Group and BAIC Motor Corp, plans to increase local sourcing and start a small battery assembly operation to meet stricter European manufacturing rules.

The company, which reopened its Linares factory in Andalusia in 2025 after a 14-year closure, aims to source 60% of vehicle components locally within three to five years, said CEO Eduardo Blanco.

Santana currently assembles vehicles from imported semi knocked-down kits supplied by its Chinese partner Dongfeng’s ZNA.

A new assembly line for BAIC vehicles is expected to open in nine months.

The factory, operated as a joint venture with China’s Anhui Coronet, began production last month with 80 employees and plans to expand to 300 jobs.

Santana’s strategy follows a broader trend of Chinese carmakers partnering with Spanish firms to navigate EU trade rules that favor locally made vehicles and components.

🔗 Source: Bloomberg

🧠 Food for thought

Implications, context, and why it matters.

Santana’s 60% local sourcing may not exempt vehicles from EU anti-circumvention rules

Santana targets 60% local components to lift value created in the EU. That percentage does not secure EU origin for trade. Customs can treat EU‑assembled SKD/CKD (semi knocked‑down/complete knocked‑down) as circumvention when most parts value stays Chinese 1. Origin calls are case by case 1.
The News Article mentions ‘small battery assembly’, and the local value addition is unclear. Assembling semi‑knocked‑down kits as Santana does with Dongfeng’s ZNA (Zhengzhou Nissan Automobile) rarely confers EU origin, so customs can still deem origin Chinese and apply trade remedies 1.
Magna and XPENG could still face EU duties on models assembled in Austria if processing fails to confer EU origin, such as simple SKD/CKD work 1.

Suppliers can tap Spain’s PERTE VEC to build near Santana in Linares

Santana plans 300 staff and a BAIC (a Chinese state‑owned automaker) line within nine months, giving suppliers a short window to set up nearby before 60% sourcing locks in over three to five years.
Spain’s PERTE VEC (a national funding program for electric and connected vehicles) runs in 2025 2. The government awarded €5.5 million to Desay SV through PERTE VEC III for its Linares intelligent factory 3.
Desay SV targets 1.5 million automotive displays a year by 2028 3. Cabin electronics, driver‑assistance, plus battery firms, can co‑locate in Linares to supply Santana and Desay 3.