by Belgium provides Volvo with financial support for the Ghent plant
The Belgian government is allocating up to $136.4 million to Volvo to support its plant in Ghent. These funds will be directed toward “industrial, innovation, and environmental initiatives.” Additionally, Volvo has hinted that this plant could be used for contract manufacturing of vehicles for other brands.
The issue of overcapacity among European automakers
European automakers are facing the problem of excess production capacity. This has prompted some of them to seek partnerships with Chinese companies looking to build cars on the continent. Stellantis and Dongfeng have started this process, while Nissan and Chery are discussing contract manufacturing in the UK.
Agreement between Volvo and the Belgian governments
Today it became known that Volvo may follow a similar path. The company announced the signing of a Memorandum of Understanding with the federal government of Belgium and the regional government of Flanders. The purpose of this agreement is to “strengthen the long-term competitiveness” of the Ghent plant.
The agreement stipulates that the government will provide up to 119 million euros ($136.4 million or £100.8 million) for “industrial, innovation, and environmental initiatives, as well as financing programs and measures.” Volvo stated that these funds “will help secure the future use of the plant and support ongoing production activities.”
Possibility of contract assembly for other brands
In addition to ensuring the continuation of Volvo production in Belgium, the automaker hinted that this move could create opportunities for using the plant for “contract assembly of vehicles for other brands.” Volvo presented this as a mutually beneficial situation, as it would increase plant utilization and boost industrial activity in the region.
Which brands could be produced in Ghent?
Volvo did not disclose which specific other vehicles could be produced at this plant, but the company is owned by Geely. In addition to its own brand, Geely owns Polestar, Zeekr, and Lynk & Co, among others. For Chinese brands, production in Ghent would be attractive as it would allow them to avoid high EU tariffs.
Current production at the plant
Currently, the plant produces a variety of models, including the EX30, XC40, EX40, EC40, and V60. Volvo reports that the plant opened in 1965 and currently employs around 6,300 people.
This agreement is part of a broader trend where European production capacity is becoming a key asset for Chinese automakers seeking to avoid trade barriers. For Volvo, which already has a track record of production in Europe, this could be a way not only to maintain but also to expand the use of its Ghent plant, transforming it into a multi-brand manufacturing hub. Such a move would allow Geely to use its resources more efficiently and respond more quickly to demand in the European market, especially in the electric vehicle segment, where competition is constantly growing.
