It’s no secret that China’s automakers have been eyeing a bigger piece of the European market. Now, one of them may be about to gain a foothold right in the heart of Germany’s automotive landscape.

Back in January, reports surfaced that several Chinese carmakers were interested in buying or leasing two Volkswagen plants, one in Dresden, the other in Osnabruck, both of which are set to shut down as part of VW’s ongoing cost-cutting efforts.

More: Chinese Brands Fly In Record Number Of Foreign Journos And Influencers To Shanghai Show

Now it appears that Chery, China’s fourth-largest carmaker, which sold 2,603,916 vehicles in 2024 through its nine brands and joint ventures including with Jaguar Land Rover, is close to finalizing a deal to take over the two plants as it prepares to expand into European markets.

Chery Eyes Germany for Local Production

The company confirmed that it’s in advanced talks to start building cars in Germany, but didn’t reveal if it is VW it is negotiating with. Vice president of Chery International, Charlie Zhang, told Autonews Europe that the final decision will be made after all possible issues are solved. “We need to study the feasibility plan, because in Germany, the situation is very, very complicated,” Zhang said, adding that the company wants detailed info on regulatory requirements, labor unions, supply chains and costs.

If it comes to an agreement to purchase the two German plants, it intends to manufacture models for its brand-new Lepas brand that was launched only a few weeks ago, on April 2, and sells modified versions of Chery‘s Tiggo range that will be available in global markets. European-made models will include two compact and one midsize SUVs with combustion, plug-in hybrid or all-electric powertrains.

In any case, Chery is no stranger to building cars in Europe in an effort to avoid the hefty taxes imposed on Chinese EVs by the EU as, since 2024, it has been assembling cars at a former Nissan factory in Barcelona, Spain in partnership with local firm Ebro.

Zhang revealed that Chery is gearing up to upgrade that facility in order to increase production of the Tiggo PHEV SUV and add EV versions of the Omoda and Jaecoo brands that will be sold in the Old Continent.

By spreading its production across multiple European sites, Chery appears to be positioning itself not only to avoid trade barriers but also to tailor its offerings more directly to local market demands.