Ford and Geely Reshape Global Automotive Procurement

Ford and Geely Auto Group have announced a Europe-focused manufacturing joint venture in Valencia, Spain, combining production capabilities to manufacture next-generation multi-energy vehicles.

This collaboration reflects a major transformation in automotive procurement, driven by the need to navigate rising cost pressures and stricter regulations. By increasingly sharing production capacity, supplier networks, and sourcing expertise, manufacturers are working together to boost operational efficiency.

Automotive procurement within the industry

As prices rise, tariffs are enforced and suppliers push for greater transparency, the automotive industry faces significant hurdles. 

Data from Order.co highlights that these key challenges span multiple critical areas, including spending visibility, cost management, supplier reliability, quality control and environmental sustainability.

To adapt to the industry's evolving landscape, automotive suppliers can follow key procurement strategies. These involve implementing tariff-aware procurement practices, enhancing supply chain stability and striking a balance between access and just-in-time efficiency.

The partnership between both OEMs enhances sourcing stability and supports the success of the Valencia plant, offering long-term stability and the potential to expand high-tech manufacturing jobs in the future.

Manufacturing at the new facility 

Subject to regulatory approvals, production of Ford and Geely vehicles at the facility is slated to start in the first half of 2027, with the first models arriving in 2028. 

The site's manufacturing lineup will feature Ford vehicles, such as the Ford Bronco, an all-new Ford crossover and the Ford Kuga, which is currently built in Valencia. Additionally, Geely will manufacture two brand-new electric SUVs at the location.

“For nearly 50 years, Valencia has built some of the most-loved cars in our history, and now this team will help build our future,” explains Jim Baumbick, President, of Ford Europe.

“That's why we're building a flexible, cost-effective industrial system with a capable partner in Geely Auto. Together we can fully utilise a best-in-class plant with a great workforce and match the industry's new cost benchmark.

"This is all part of Ford's vision to give European drivers rally-bred handling, true off-road capability and multi-energy technology, with a distinct Blue Oval DNA.”

“This partnership shows how automakers are strengthening Europe's industrial base, but we can't do it alone. What we've achieved in Valencia, with the ongoing support of Spain's national and regional governments, is a masterclass in public-private partnership that sets the benchmark for the rest of Europe.”

Cost optimisation between both OEMs

Amid ongoing automotive challenges in Europe, including international trade disputes, shifting EV demand, lagging local battery manufacturing and intense competition from lower-cost Chinese brands, this alliance is poised to boost productivity and reduce individual vehicle manufacturing costs, delivering a significant economic lift to Valencia.

Alex Nan, Vice President of Geely Auto Group, adds: “This JV with Ford in Europe reflects our commitment to open, collaborative product development as part of our growth strategy, deepening our local presence and commitment to customers in Europe.

“We are dedicated to delivering vehicles that European customers will choose on merit: on industry leading features, on high-quality and on actively contributing to Europe's green future. Put simply: we are building cars in Europe, for Europe, alongside a trusted partner.”

According to the terms of the new agreement, the new entity will be owned 66% by Ford and 34% by Geely.