Chery's European Ambitions: Partnering with VW to Produce Lepas SUVs in Germany
By Team Dailyrevs April 30, 2025
Chery is close to striking a deal with Volkswagen to produce its new “Lepas” SUVs inside VW’s German plants.
-
This move helps Chery dodge EU tariffs while giving VW’s underused factories a new lease on life.
-
Chery’s European strategy includes EVs, hybrids, and combustion cars — all tailored for local buyers.
Chery Wants In – And Fast
In a move that could shake up Europe’s automotive balance, Chinese automaker Chery is deep in talks with Volkswagen to produce cars on European soil. But not just any cars — we’re talking about an all-new brand called Lepas, aimed squarely at European buyers hungry for affordable, tech-laden compact SUVs.
The strategy? Use VW’s German plants — particularly the ones in Dresden and Osnabrück, which haven’t exactly been running at full throttle — to build Chery’s vehicles locally.
What Is Lepas, and Why Should Europe Care?
Chery announced Lepas earlier this month as a fresh sub-brand with a clear mission: build the kind of compact and midsize SUVs that European families are buying — only make them cheaper, smarter, and with more electrified options. The Lepas L6, expected to be the debut model, will offer multiple powertrains: from regular gas engines to plug-in hybrids and full EVs.
If this sounds like a direct challenge to Europe’s budget crossovers from Renault, Volkswagen, or even Dacia, that’s because it is.
Why Volkswagen Might Say Yes
Volkswagen has had a rough couple of years. Slowing sales, excess capacity, and rising EV competition have made some of its German factories look more like expensive real estate than production powerhouses. So when Chery knocked with a proposal to build cars in Germany — and pay for the privilege — VW listened.
The benefit? Volkswagen gets to revitalize dormant capacity without investing heavily. Chery, in return, gets access to Europe minus the tariff headaches that come with shipping cars from China.
Don’t Call It a Joint Venture… Yet
Right now, everything is still on the table. Chery says it hasn’t signed anything — but the talks are serious. One possible scenario involves forming a new joint venture, much like what it did recently in Spain when it partnered with a local company to take over Nissan’s old plant in Barcelona.
Chery’s Vice President, Charlie Zhang, summed it up frankly:
“We need to study the feasibility plan, because in Germany, the situation is very, very complicated.”
Between labor regulations, union structures, and the logistics of working inside another automaker’s plant, “complicated” might be putting it mildly.
The Bigger Picture: EVs, Europe, and Global Ambition
This isn’t a one-off play. Chery is clearly positioning itself to go global, and Europe is a key market. The company already sells more than 2.6 million vehicles annually in over 80 countries. Now it’s using its growing momentum — and a surprisingly flexible product lineup — to become a serious threat to legacy European automakers.
What’s especially clever is the multi-powertrain approach. While most Chinese brands lean fully into EVs, Chery’s offering hybrids and gasoline options too — a practical choice for European buyers still hesitant about full electric.
Final Word
If the deal between Chery and Volkswagen goes through, we’re looking at a rare win-win. Chery gets EU legitimacy without the baggage of tariffs or port slowdowns. VW gets production breathing room — and perhaps a lesson in how to stay lean and flexible.
And Europe? It gets another automaker promising better-equipped cars at lower prices. Competition is about to get real.
Source : Metal