On 14 October, Italy’s industry minister Adolfo Urso told parliament that Chinese carmakers are touring Europe asking for “a turnkey factory”. In Italy, they found none.
A month earlier, BYD’s European adviser Alfredo Altavilla said Spain and France were the company’s most actionable options. His team is running feasibility studies on candidate sites, and Altavilla said BYD plans to choose the location of its second European plant by the end of the year. Over time, he said, BYD would need three assembly plants and one battery factory in Europe.
Competition for suitable sites is visible. Altavilla told Reuters that representatives of Chinese manufacturers looking at the same facilities sometimes run into each other at airports.
Xpeng is under similar time pressure. The company manufactures vehicles with Magna in Austria, but vice-president Yeqing Zheng says the available capacity is “not even sufficient” for its current needs. Xpeng expects to decide within months whether to open a new production line with a European partner or acquire an existing facility.
Feasibility studies are under way, candidate factories will need refurbishing, and Xpeng is looking for manufacturing capacity and local suppliers. Several of these needs will require support on the ground in Europe.
Manufacturing investment is already creating local demand
Chinese foreign direct investment in Europe rose 67% in 2025 to €16.8 billion, according to Rhodium Group and MERICS. Their definition of Europe covers the EU and the United Kingdom.
Greenfield investment reached a record €8.9 billion. Automotive accounted for €7.6 billion, or 45% of all Chinese FDI, almost entirely linked to the EV and battery value chain. M&A activity also increased strongly, so the figures do not point to a simple shift from acquisitions to greenfield production.
What they do show is substantial investment in European manufacturing capacity. Cars provide the clearest examples today, but setting up production locally requires much more than finding a building.
A factory creates a chain of European service contracts
Before a manufacturer uses a site, it needs to know whether the facility fits the production plan.
Engineers assess production lines, machinery, utilities, automation, energy capacity and refurbishment costs. Lawyers structure the acquisition, lease, joint venture or manufacturing agreement. Tax advisers work on the corporate structure and cross-border flows.
Environmental specialists review permits and possible liabilities. Investment advisers assess public incentives. Recruiters and employment lawyers help build the workforce. Logistics companies connect the plant with customers and suppliers. Manufacturers start sourcing components, tooling, electronics, packaging and other inputs in Europe.
These assignments do not have to go to large international consultancies. A specialist manufacturer in Poland, for example, can be relevant to a factory in Spain if it supplies the right component competitively.
The demand does not stop at the factory gate. Reuters reported on 15 October that Chinese automakers are building dealer networks, parts warehouses and after-sales support across Europe. Changan alone expects 650 dealerships by next year.
From factories to suppliers
Yeqing Zheng says finding a local battery supplier that meets Xpeng’s requirements for both charging performance and energy density will be difficult.
Changan’s Zhao Fei told reporters at the Paris Motor Show that he had visited Europe twice for in-depth discussions with suppliers. Changan plans to produce 180,000 vehicles a year in Europe by 2028 and 350,000 by 2030. The company is also talking with European automakers about possible joint production.
Chery chairman Yin Tongyue describes the company’s strategy as “local engineering, local production and a local supply chain”.
These investments raise practical questions:
Which existing factory meets our requirements?
Which European company can manufacture with us?
Who can conduct the technical feasibility study?
Which suppliers meet our specifications?
How should the investment be structured?
Which permits and environmental assessments are required?
Where do we recruit the workforce?
Which logistics and supply-chain companies can support the plant?
EU policy could create additional demand
The proposed Industrial Accelerator Act could make local production even more important. The European Commission published the proposal in March 2026, and it is still moving through the EU legislative process.
The rules would apply to certain investments above €100 million in batteries, EVs, solar and critical raw materials. They would target investors from countries that account for more than 40% of global production capacity in the relevant sector.
Under the Commission’s proposal, qualifying investments would have to meet at least four of six conditions: a cap on foreign ownership, a joint venture with an EU partner, IP licensing to the EU business, at least 1% of annual revenue spent on R&D in the EU, working towards 30% European inputs and employing at least 50% EU workers. The employment condition would be mandatory.
A joint venture needs a partner and legal advisers. European R&D needs research or technology expertise. Local sourcing means identifying suppliers. The employment requirement creates work around recruitment, payroll and employment law.
The legislative process is still under way, and the final conditions may change. Chinese manufacturers, meanwhile, are making decisions about factories, suppliers and European production.
The shortlist is being built before the factory opens
Large Chinese groups have investment teams, international advisers and established networks. They also use referrals, local contacts, industry platforms and Chinese-language sources to identify companies they want to speak to.
A European provider can have the right expertise and remain outside that search.
A German engineering company may show its best projects only in German and English. A Spanish industrial adviser may know facilities that receive little international exposure. A Polish component manufacturer may have exactly the capability a Chinese buyer needs without appearing in the Chinese-language sources used during the first stage of research.
By the time the European company hears about the project, the investor may be speaking to a small group of potential providers.
Carmakers make the headlines. Around each new plant, Chinese component suppliers and mid-sized manufacturers may follow, often with smaller international teams, fewer advisers and fewer established contacts in Europe. That is the part of the market where an early introduction becomes particularly relevant.
Where EnterChina fits
Xijinmenhu (西进门户), EnterChina’s Chinese-language platform, helps verified European B2B providers become visible while Chinese companies are still researching suppliers and service providers
We prepare Chinese-language company profiles that explain what a provider does, which industries it serves, where it operates and what types of projects it handles.
When a Chinese company sends an enquiry, our team supports the initial exchange and gives the European provider the context of the request. The provider then decides whether and how it wants to continue the conversation.
The platform does not replace the engineer conducting a feasibility study, the lawyer structuring an acquisition, the recruiter building a workforce or the manufacturer supplying components. It gives these companies another way to be found while a Chinese buyer is still researching and comparing potential providers.
When a Chinese company starts looking for European expertise, will it be able to find your company?
Sources
Reuters, 14 October 2026 — No auto plants available in Italy for Chinese purchase, Italian minister says
https://www.reuters.com/world/china/no-auto-plants-available-italy-chinese-purchase-italian-minister-says-2026-10-14/
Reuters, 17 September 2026 — Chinese automakers scour Europe for factories ahead of EU local-content rules
https://www.reuters.com/business/autos-transportation/chinese-automakers-scour-europe-factories-ahead-eu-local-content-rules-says-byd-2026-09-17/
Reuters, 12 October 2026 — Xpeng executive says EV maker will expand European production ahead of local-content rules
https://www.reuters.com/world/china/xpeng-executive-says-ev-maker-will-expand-european-production-ahead-local-2026-10-12/
Reuters, 13 October 2026 — As EU debates local-content rules, Chinese automakers are already adapting
https://www.reuters.com/business/autos-transportation/eu-debates-local-content-rules-chinese-automakers-are-already-adapting-2026-10-13/
Reuters, 15 October 2026 — For Chinese automakers, the road to survival runs through Europe
https://www.reuters.com/business/autos-transportation/chinese-automakers-road-survival-runs-through-europe-2026-10-15/
Rhodium Group / MERICS, 20 May 2026 — Chinese Investment in Europe Rises to Seven-Year High: Chinese FDI in Europe 2025 Update
https://rhg.com/research/chinese-investment-in-europe-rises-to-seven-year-high-chinese-fdi-in-europe-2025-update/
European Commission, 4 March 2026 — Industrial Accelerator Act
https://single-market-economy.ec.europa.eu/publications/industrial-accelerator-act_en
Houthoff, 20 March 2026 — Proposed Industrial Accelerator Act: what investors and suppliers need to know
https://www.houthoff.com/insights/news/proposed-industrial-accelerator-act-what-investors-and-suppliers-need-to-know/
European Parliament — Industrial Accelerator Act, procedure 2026/0068(COD)
https://oeil.europarl.europa.eu/oeil/en/procedure-file?reference=2026%2F0068%28COD%29