After months of talks, it's official.

Ford Motor and Chinese counterpart Geely are becoming partners in Europe. Investors are nervous about the Chinese auto industry -- for good reason -- but the deal is still a plus for them.

For Ford, the collaboration promises to improve asset utilization and technology in a tough market. For Geely, it's an opportunity to expand outside of its home market.

Ford will control 66% of the joint venture, which will operate out of Ford's plant in Valencia, Spain.

Geely gets growth in Europe through local capacity, and Ford gets capital for the Spanish plant along with more vehicle designs that will hit dealer networks by 2029.

"The joint venture addresses the new realities of the European market -- intense global competition, relentless cost pressure and tightening regulation -- resetting Valencia to build at the industry's emerging cost benchmark," according to a statement that announced the deal on Thursday.

Chinese auto makers are growing in Europe, which has pushed down profits for the sector. BMW and Mercedes-Benz Group, for instance, are expected to make less money this year than last. So is Volkswagen, which announced a sweeping restructuring plan earlier this month that could cut 100,000 jobs.

The Chinese are effectively locked out of the U.S. market by tariffs. Barring a change in policy, they would need to build capacity and a dealer network to start participating. That would require years and billions of dollars.

Investors can't really complain about acting fast to improve European operations. Ford doesn't report profit by region anymore, but it generates about 25% of its annual revenue outside of North America.

In Friday trading, Ford stock was up 1.5% in early trading at $14.34. The S&P 500 and Dow Jones Industrial Average were both up 0.2%.

Ford's gains for this year stand at 8% and 25% for the past 12 months.

The company reports second-quarter earnings on Tuesday. Investors can hear more about the partnership then. Wall Street expects an operating profit of $2.1 billion, flat year over year.

Write to Al Root at allen.root@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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July 24, 2026 10:49 ET (14:49 GMT)

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