Ford and Geely Automobile agreed to a new manufacturing partnership that allows the Chinese automaker to build some of its cars at Ford's Valencia plant in Spain, while also committing to jointly develop a new SUV.

The deal is the latest move by a Western automaker to open its European factory gates to Chinese competitors as they look to fill capacity and secure the future of their production sites amid challenging market conditions. Tech-heavy Chinese-made cars continue to erode market share for Western carmakers both in China and increasingly in Europe, prompting companies to seek partnerships as a way to tap into Chinese technology while cutting costs through shared purchasing and engineering.

Stellantis said recently that two of its factories in Spain would produce electric vehicles with China's Leapmotor, while a separate deal will see Dongfeng assemble at least one of its premium Voyah-branded electric vehicle models at a Stellantis factory in Rennes, France.