Volvo Cars' manufacturing plant in Ghent, Belgium, will continue vehicle production in the coming years, supported by new subsidies from the Flemish government.
The facility, owned by Chinese conglomerate Geely, may also produce vehicles for other Chinese brands in the future, marking a significant shift in the region's automotive landscape.
The decision highlights the pragmatic approach of regional authorities to preserve industrial jobs and maintain supply chain stability, even as geopolitical tensions between Europe and China intensify.
The subsidies are seen as a critical lifeline for the plant, which has faced uncertainty amid broader industry restructuring and the transition to electric vehicles.
This development comes as European automakers grapple with the strategic implications of sourcing technology and components from China.
Volkswagen, for instance, is reportedly considering sourcing core EV technology from Chinese partners rather than relying solely on its traditional German development hubs.