China’s Automakers Pursue Global Growth Without Heavy Factories

As detailed in a recent industry report, Geely has led the push toward an asset-light business model, opting to partner with local players rather than deploy heavy capital overseas. The company’s strategy reflects an awareness that foreign markets now demand localized manufacturing or at least local-support services, and that exporting from China alone may not be enough, especially under shifting trade policies. Using local partners and leveraging existing production capacity allows a rapid and cost-efficient footprint expansion without upfront investment in new factories.

This trend is not limited to Geely. XPeng has publicly set a goal of entering dozens of foreign markets and building hundreds of overseas service centers, aiming for half of its sales to come from overseas by the early 2030s. Meanwhile, SAIC and other established automakers have started adapting their models, blending exports, localization, and cooperation, to balance risk and opportunity abroad.

The advantages of this asset-light model are clear. By avoiding heavy capital investment, automakers preserve cash flow and reduce exposure to uncertainties, including regulatory changes, currency fluctuations, and demand swings in foreign markets. This flexibility allows them to respond quickly to changing market conditions and consumer preferences, which is especially important in the volatile EV segment. It also shortens time to market, a key advantage in fast-moving segments like new energy vehicles (NEVs) and connected EVs.

But the model also has drawbacks. Without fully localized manufacturing and integrated supply chains, automakers may struggle to build brand loyalty and operational resilience. Dependence on partners could limit quality control, innovation capacity, or long-term competitiveness. As industry observers note, for Chinese automakers to graduate from being “exporters” to being true global brands, a mix of localization, deeper value-chain embedding, and sustained after-sales/service networks will likely be required.

In sum, China’s automakers’ turn to asset-light overseas expansion reflects strategic adaptation to a complex global environment. It offers speed, scalability and risk mitigation, but its ultimate success will depend on execution, quality, local adaptation and whether these firms can evolve from opportunistic expansion to long-term global presence.