Bad news for the automotive alliance between Chery and the Catalan company EV Motors (Ebro) for the manufacture of cars in the former Nissan facilities in the Barcelona free zone, now called Ebro Factory. The Chinese manufacturer has decided to delay the manufacture of the SUV Omoda 5, whose production was to start after the return from vacation, in early October. In exchange, the joint venture Production of Ebro brand SUVs will move forward and start in November. This is a substantial change from the initial plans.
This was communicated by the first Chinese leader of the alliance, Xu Johnson, to the unions, in a meeting also attended by the president of EV Motors and CEO of BTech, Rafael Ruiz. This Tuesday, the management team of the Chery-Ebro alliance informed the government of the Generalitat. Chery’s main argument is the application of customs duties to Chinese electric vehicle brands by the European Union, something that does not please the workers’ representatives, since Chery had planned to start production with the combustion Omoda 5, and the electric version was expected to arrive within a year. The Chinese carmaker confirmed these plans in July to a delegation from the Generalitat and the Barcelona City Council.
Chery now wants to buy time to obtain approval as a European manufacturer, which, if successful, would allow it to avoid customs duties, even if the components it imports to assemble the vehicles in Barcelona come from China. “Chery assures that with the tariffs, it is not reaching the margin per car that it had planned,” according to a union representative present at the meeting. Ebro hopes to obtain this authorization in the coming weeks, which would allow it to avoid customs duties even if the parts also come from the Asian giant.
20,000 units in 2025
The Ebro models that will begin to be assembled in the free zone have technology and a platform shared with its partner Chery. In fact, they are just versions of the Tiggo, the SUV that Chery sells in many Asian and Latin American markets. Thus, after the sudden changes of plans, the production schedule planned today is to begin manufacturing the Ebro S700 from November 18, the S800 from November 28 and the S400 would arrive in June 2025. The latter, smaller than the previous two, is a third car from the reborn Spanish brand that was not included in the initial plans. As reported by the unions, the production of the three Ebro models planned for 2025 is 15,000 units.
According to the previous schedule, a first shift will be incorporated in November, a second in April 2025 and a third in June 2025. In total, when all three shifts are operating, approximately 300 workers will be employed. Production will be carried out with a DKD system (directly overturnedin its English acronym), that is to say when the vehicles are received almost complete and some parts are assembled.
When the Omoda models are integrated into the Barcelona production line, within a year, manufacturing will be done in CKD (completely overturned), where all the parts and pieces of the vehicle come from China and are assembled here. A higher level of disassembly requires more work to reassemble the vehicles, which means more jobs and local value creation in the market that counts. In principle, it is expected that in the first year around 5,000 units will be manufactured, which will be added to the 15,000 of the Ebro.
Labor shortage weighs on profitability
The alliance must accelerate the pace of production as quickly as possible if it does not want to lose even more money and delay its profitability. Currently, 150 people are working and about 600 have been in training since January. But on October 1, these 600 people, whether there is production or not, will move from a training contract to a permanent contract subject to the metal agreement increased by 20%, in accordance with what was agreed at the reindustrialization table.
The two companies, Chery and Ebro, assured in the spring, after announcing the agreement and the production plans of their respective brands with a public-private investment that the President of the Government, Pedro Sánchez, estimated at 400 million euros, that they would have 1,250 workers in the Free Zone facilities to produce 50,000 vehicles in 2027 and 150,000 in 2029.
The fact that the alliance has replaced the Omoda models with Ebro to start production should not have major consequences in industrial terms. The problem is that an Ebro is not an Omoda. The first is a brand to be built while the Chinese brand has already been present in Spain for months and has a commercial structure. That is why the unions have insisted that the alliance intensify its commitment to the launch of the Ebro models with aggressive strategies to boost its market entry and thus guarantee the highest possible production volumes.
