In Depth: Chinese Carmakers Shift to ‘Asset-Light’ Models in Overseas Expansion

Chinese automotive group Geely is accelerating its global expansion with an “asset-light” investment model, as Chinese automakers face intensifying competition and the international shift toward electric vehicles (EVs) demands faster, less risky overseas moves. Instead of relying on heavy investments to build wholly owned factories abroad, Geely’s strategy emphasizes joint ventures (JVs) and operational partnerships utilizing existing local production infrastructure. This approach is being adopted by increasing numbers of Chinese car companies to navigate trade barriers, rising geopolitical tensions, and financial constraints, reflecting new industry realities in the global EV market. [para. 1][para. 4][para. 7]

One of Geely’s most recent moves is the acquisition, alongside parent company Zhejiang Geely Holding Group, of a combined 26.4% stake in Renault Group’s Brazilian subsidiary. This deal, described as a technology-for-equity swap, grants Geely access to Brazil—South America’s largest automotive market—while allowing for the local production and sale of new-energy vehicles (NEVs). Renault’s Brazilian arm will distribute Geely’s zero- and low-emission vehicles and adopt Geely’s GEA platform to expand its EV lineup, with both companies’ vehicles being produced at Renault’s Ayrton Senna plant. [para. 2][para. 3]

Geely’s “asset-light” expansion strategy was highlighted during a London roadshow, where CEO Gan Jiayue expressed openness to more partnerships in Europe, especially those capitalizing on underused local production capacities. This echoes earlier comments from Geely chairman Li Shufu urging pragmatic international collaborations and resource-sharing to tackle global overcapacity in the auto industry. The model replaces huge upfront capital investments with locally tailored partnerships, reducing risk and boosting adaptability in changing markets. [para. 5][para. 6][para. 7]

This approach is not new for Geely. Its initial experiment with the model took place in 2022, acquiring 34% of Renault’s South Korean JV. This allowed co-production of both fossil-fuel and hybrid vehicles at Renault’s Busan plant, capitalizing on Geely’s Compact Modular Architecture for export purposes. The move exemplifies how leveraging technology and existing assets through JVs accelerates and de-risks overseas market entry. [para. 8]

Industry expertise supports this strategy: Tang Liming, Geely Auto Group’s chief strategy officer, cited Toyota’s historic JV with General Motors in the 1980s as a precedent for using asset-light models to gain vital local market insight without the full burden of unfamiliar regulations and enormous costs. Dai Qing, rotating president of Zhejiang Geely Holding, estimated that constructing an overseas plant typically costs 6–7 billion yuan ($842–$983 million), requiring sales of 300,000 cars to break even—underscoring the allure of asset-light approaches. [para. 10][para. 12]

Even in welcoming markets, Geely often opts for collaborative upgrades to existing facilities. In Malaysia, Geely and Proton transformed an old industrial site into a high-tech EV assembly plant, with a 49.9% stake held by Geely and annual capacity of 20,000 vehicles. The plant can also contract manufacture for other automakers. [para. 14][para. 15]

Other Chinese automakers, such as Chery and Leapmotor, are following suit. Chery joined with EV Motors to restart a former Nissan plant in Spain, while state-owned SAIC scaled back direct investment in India amid regulatory barriers. Leapmotor secured $1.6 billion from Stellantis, forming Leapmotor International for overseas production, and XPeng began European production through a partnership with Austrian auto manufacturer Magna Steyr. These examples show that flexible, partnership-driven models are becoming the norm for China’s globally ambitious EV makers. [para. 18][para. 19][para. 20][para. 21][para. 22][para. 23]