SHANGHAI (Reuters) -China's Geely Holding Group will use a factory once owned by SAIC Motor and U.S. partner General Motors ( GM ) in the northeastern city of Shenyang to produce clean energy vehicles, said a person with direct knowledge of the plan.

The Chinese automaker has held talks with several parties to explore the plan's feasibility in recent months, said the person. No final decision has been made over which models or brands would be made at the plant, they added.

The person declined to be named as they were not authorised to speak to the media.

Geely declined to comment on the proposal. GM and SAIC did not immediately respond to requests for comment.

As one of GM's Chinese plants equally owned with SAIC, the Shenyang Norsom factory had an annual capacity of 500,000 vehicles and was used to make Buick GL8 minivans and the Chevrolet Tracker SUV for the China market. GM and SAIC closed the plant in February after sales of the U.S. automaker's Chevrolet, Buick and Cadillac brands slumped in China - to 500,000 units in 2024 from a peak of 2 million units in 2017.

Geely's move underlines its strategy of utilising existing car production facilities rather than building new plants. Chairman Eric Li warned in June of "serious overcapacity" in the global automotive industry.

Geely also on Monday finalised a deal to use Renault's plant in Brazil to produce Geely-branded cars for sale in the biggest Latin American market.

Geely's sales have been growing this year and it has been taking market share from domestic rival BYD. The group's total vehicle sales in the nine months to the end of September rose 29% from a year ago to 2.95 million units, as sales of its cost competitive clean energy models including pure electric, plug-in hybrids and methanol-powered vehicles surged 68%.

Geely's listed arm, which includes its Geely, Zeekr and Lynk & Co brands, saw its share of the domestic market grow to 11% in the first nine months from 7.6% a year ago, while BYD's dropped from 15.8% to 14.9%.

Chinese media outlet LatePost first reported Geely's plan to use the Shenyang factory on Monday.