Flanders Offers Volvo €119M to Secure Ghent Factory Future
The Flemish government has offered Volvo Cars a subsidy package worth up to €119 million to secure the future of its Ghent factory — the last remaining car manufacturing plant in Belgium. The offer, sent as a declaration of intent to Volvo’s headquarters in Sweden, aims to convince the Chinese-owned automaker to invest billions of euros in modernizing the facility.
A Lifeline for Belgium’s Last Car Factory
The Ghent plant, established in 1965 and now owned by China’s Geely Holding Group, employs approximately 6,500 people and produces over 200,000 vehicles annually — more than 30% of Volvo’s global output. The factory builds five models including the XC40/EX40, EC40, EX30, and V60.
Belgium was once a major European automotive manufacturing hub, but has seen a steady decline over the past two decades. The closures of Renault Vilvoorde (1997), Opel Antwerp (2010), Ford Genk (2014), and Audi Vorst (2025) have left Volvo Car Gent as the nation’s sole remaining car plant. Its potential closure would mark the end of an era for Belgian automotive manufacturing.
The Subsidy Package
The €119 million offer is broken into three components:
- €30 million for investments in energy efficiency and circular production processes
- €80 million (spread over 10 years) for innovation support in battery technology, digitalization, and advanced manufacturing
- €9 million for workforce training projects
Flemish Minister-President Matthias Diependaele (N-VA) emphasized that the funding is conditional. “This is not a blank cheque,” Diependaele told Het Laatste Nieuws. “The funding will only be provided once the investments are actually made and when they contribute to jobs, innovation, and sustainable anchoring in Flanders.”
Volvo Car Gent spokesperson Barbara Blomme welcomed the offer. “This is a clear signal from the government that it believes in the further sustainable development of our sector in the region,” she said.
Competitive Pressure from Slovakia
The subsidy offer comes amid months of uncertainty about the plant’s future. Volvo CEO Hakan Samuelsson has previously warned that the Ghent facility is “too expensive,” and the company is building a new €1.2 billion EV-only factory in Kosice, Slovakia — its first new European plant since the 1960s.
The Slovak facility, initially planned for 2026 production but delayed to early 2027, is designed for fully electric production with lower labor and operating costs than Western Europe. Unions fear that two of Ghent’s three electric models could be shifted to Slovakia.
According to The Brussels Times, the Flemish government hopes the financial support will address Volvo’s concerns about operating costs. The situation is further complicated by Volvo’s global sales declining by 10% in 2025, with 710,000 vehicles sold worldwide.
Political Mobilization
Belgian Prime Minister Bart De Wever (N-VA) quietly established a high-level task force in January 2026 to secure Volvo’s future in Belgium. The task force, which includes vice-premiers and the Flemish minister-president, has been meeting regularly to address key issues including labor costs, energy expenses, and electric vehicle policy.
The Brussels Times reported in April that a source stressed there is currently no immediate danger to the Ghent factory but noted the importance of proactive discussions. The task force is set to continue negotiations with Volvo’s management.
Broader Challenges
The Ghent plant recently faced additional headwinds. A strike at supplier Plasman in late May and early June 2026 forced Volvo Car Gent to halt production and cancel five shifts, highlighting supply chain vulnerabilities. The strike was resolved on June 5, with production restarting just a day before the subsidy announcement.
Beyond labor disputes, the European EV market faces intense pressure from Chinese manufacturers despite EU import tariffs. The question of whether Volvo’s new Slovak factory was even necessary has been raised internally, given that the company’s sales have not grown as projected.
What’s Next
The €119 million offer represents a significant commitment from the Flemish government, but it remains only a fraction of the billions Volvo needs for modernization. Key questions remain unanswered:
- Will the federal Belgian government also prepare additional support measures?
- Which models will be allocated to Ghent versus Kosice in the long term?
- What specific conditions regarding job guarantees will be attached to the subsidies?
- How will EU state aid rules apply to this package?
For the 6,500 workers at Volvo Car Gent and the thousands more in the supply chain, the coming months will be critical. The Flemish government has made its move — now the ball is in Volvo’s court.