Spain clears Chinese carmaker SAIC's Ferrol plant despite intelligence espionage warnings

Security concerns surface

Spanish newspapers El Mundo and El País reported on Monday, August 10, that Spain's intelligence services (CNI) and the military had warned in internal reports of espionage risks from SAIC Motor's planned factory in Ferrol. The plant would sit 5 kilometres from a key Spanish navy arsenal and the Navantia shipyard, where F-110 frigates are under construction and sensitive military technology, including US military systems, is handled. Officials were concerned the Chinese state-owned company could obtain sensitive information about the navy's daily movements, the newspapers cited unnamed military sources as saying.

Regional pushback

Galicia's regional president, Alfonso Rueda, expressed "perplexity" at the security reservations, saying he had never been informed of any risks during months of joint negotiations with the central government. He rejected reports that Defence Minister Margarita Robles had recently conveyed her concerns to him.

“It is difficult to understand that, regarding a file that we have been processing jointly between the Government of Spain and the Xunta of Galicia for many months, whose content we know perfectly, a department of the central government now makes these pronouncements.”

“At no time was there any talk of a lack of security, nor of any risk.”

Rueda called on the government to reconcile national security with what he described as a "historic opportunity" for Galicia.

Defence Ministry clears the project

Within 48 hours of the reports, Robles contacted Rueda on Tuesday, August 11, to confirm that the Defence Ministry would issue a favourable report on the project, without prejudice to such "operational conditions" as may be necessary from the standpoint of its competencies. A Defence Ministry spokesperson confirmed to Reuters that the project would be subject to approval by a Strategic Investments Committee that may attach conditions on topics like security. The spokesperson would not specify what conditions, if any, the ministry would request. The minority government partner Sumar had also expressed concern following the published reports.

SAIC's response

SAIC, which owns the MG brand, said it was confident the plant would be built "fully safeguarding" Spain's national security and said it respected the review of all relevant factors for its implementation.

“The SAIC factory project on Spanish soil is of the utmost importance for the area and for the country, and from SAIC we understand that all relevant factors for its implementation should be evaluated, including not only the economic ones but also the industrial ones, job creation, and national security considerations.”

The company said it would collaborate "closely and transparently" with all relevant parties to comply with regulatory, economic, industrial, and national security requirements.

The investment

SAIC Motor, China's largest electric vehicle manufacturer, chose the outer port of Ferrol for its first European assembly plant. The project involves an initial investment of approximately 200 million euros and will create around 1,000 direct jobs plus a similar number of indirect positions. The factory, to be built on the former Amper lands covering 70,000 square metres, will produce up to 120,000 cars per year for the MG brand. Construction is due to begin in 2027, with operations starting in 2028. The Galician government has declared the project a "strategic industrial project." Prime Minister Pedro Sánchez showed interest during his trip to China in April, and Rueda also travelled to China to promote Ferrol as the investment destination, which other locations in Spain had also sought.