According to Automotive News Europe, Chinese automaker Chery is close to reaching an agreement with Volkswagen to produce vehicles from its newly launched international brand Lepas at a Volkswagen plant in Germany. Chery has confirmed that it is in talks over local production in Europe but did not identify Volkswagen as its counterpart, adding that the deal still depends on resolving several outstanding issues.
Earlier this year, international media reported that Volkswagen was seeking new partners to avoid shutting down its Osnabrück and Dresden plants, with Chinese automakers showing interest in acquiring them. A Volkswagen spokesperson commented: “We are doing our utmost to find ways to continue using these factories. Our goal is to develop feasible solutions in the interest of the company and employees.” Industry observers believe such an arrangement could be a win-win: acquisition by a Chinese automaker would help overcome tariff barriers, provide easier access to Germany and the broader European market, and preserve local jobs, while Volkswagen pursues its cost-cutting plans. Whether Chery can finalize the acquisition of a Volkswagen factory in Germany remains uncertain.
Lepas, unveiled on April 25, is Chery’s new global brand derived from the popular Tiggo SUV lineup. Its first wave of products for Europe will include two compact SUVs and one mid-size SUV, offered in electric, plug-in hybrid, and combustion versions, with sales starting in 2025. Chery International President Zhang Guibing said the brand plans to launch five new models within three years, covering key mainstream segments. Flagship SUV L8 is scheduled for December 2025, followed by the L6 (compact city SUV) and L4 (A0-class urban SUV), targeting young professionals and female customers.
Chery already began local European production in 2024 through a partnership with Ebro in Barcelona, using a former Nissan factory to assemble vehicles from semi-knockdown (SKD) kits shipped from China. The plant currently produces the Ebro S700 based on the Tiggo 7 platform, with upgrades planned to expand output of PHEV and EV models for the Omoda and Jaecoo brands. Its annual capacity could reach 200,000 units.
As China’s largest car exporter, Chery shipped 252,500 vehicles in Q1 2025, maintaining the top position among domestic automakers. The company is accelerating its overseas localization strategy to mitigate tariff risks, while NEV sales in emerging markets such as Southeast Asia and South America surged to 163,000 units in Q1, up 171.8% year-on-year. By year-end, Chery plans to expand Omoda and Jaecoo sales networks from 7 to 19 European countries, including France and Germany, with a goal of signing 100 dealerships in Germany alone.
In April 2025, Chery sold 200,760 vehicles (+10.3% YoY), including 87,738 exports (43.7% of monthly sales). From January to April, sales totaled 820,785 units (+15.3% YoY), with exports reaching 343,203 units, cementing Chery’s position as China’s No.1 vehicle exporter.
