BYD is nearing a decision on whether to acquire an existing car factory in Europe as it seeks to accelerate its expansion in the region.

Speaking at the Reuters Automotive Europe conference in Frankfurt, Germany, BYD special adviser for Europe Alfredo Altavilla said “the call needs to be made very soon”, citing proposed EU “Made in Europe” rules aimed at increasing local manufacturing.

Spain and France are being considered for a brownfield investment involving the purchase of an existing plant from a traditional carmaker.

If completed, the acquisition would provide BYD with a second European assembly location after Hungary, where production is scheduled to begin in the fourth quarter.

“This week, we have two teams looking around in different jurisdictions, so we are close,” Altavilla said.

He also questioned the competitiveness of manufacturing sites in Germany, where plants are also dealing with underutilisation.

Altavilla said “fighting that invasion is bloody useless” and described Volkswagen’s plans to intensify cost reductions as the “first real wake-up call” for Europe’s automotive sector.

He also criticised the idea that Chinese manufacturers expanding into Europe would accept minority positions in joint ventures while supplying their latest technology.

Volkswagen is weighing what would be its biggest restructuring to date, including 100,000 job cuts and the closure of four factories in Germany, as it faces tariffs, higher costs and stronger competition from Chinese rivals.

Other established carmakers are seeking ways to tackle overcapacity while continuing to invest heavily in product development and technologies including batteries and software.

Stellantis has majority holdings in joint ventures with China’s Dongfeng and Leapmotor as part of plans to increase production at facilities in Spain and France.

Last month, BYD introduced the Dolphin G DM-i, a B-segment hatchback built specifically for Europe, with up to 65 miles (104.6km) of pure-electric range.

The vehicle was the first BYD model designed with Europe as its main market.