Automobiles manufactured in China are becoming more popular in the Mexican market. According to official statistics, 20% of light vehicles sold in the Latin American country last year (equivalent to 273,592 units) were imported from China, which also represents a 50% increase compared to 2022. Mainly from Western brands that have manufacturing plants in that country. Therefore, the cars are made by General Motors, Ford, Chrysler, BMW and Renault. However, the presence of Chinese brands in particular in Mexico is gradually increasing. Some of the names that have emerged in the past three years include Changan, JMC, Chirey, Jaecoo, and Jetour.
Mexico is the world's seventh largest automobile producer, with 90% of its production destined for export, primarily to the United States. According to industry data, the country will ship 3.3 million units overseas in 2023, an increase of 15% compared to 2022. Furthermore, domestic car companies assembled a total of 3.7 million vehicles last year, an increase of 14% from the previous year. Year.
Guillermo Rosales, president of the Mexican Automotive Distribution Association (AMDA), explains that 90% of Mexico's production goes abroad, which is why Mexico imports cars to supply its domestic market. . According to their statistics, of the total number of cars sold in Mexico, 66% are imported models, and the rest are assembled domestically. Car sales in Latin America's second largest economy increased by 24.4% in 2023, with 1.3 million units sold. “We have a positive outlook for the domestic market, and we calculate that sales will increase by 7% compared to last year this year, due to economic growth and the prospect of lower interest rates, and sales could reach 1.5 million units.'' Rosales predicts.
For now, major Western brands continue to lead the trade flow between Mexico and China, but Chinese companies are increasingly interested in landing in Mexico, not just as sellers but also as ship owners. Chinese electric car maker BYD is looking for land to build a new factory in Mexico. The states of Nuevo León, Jalisco and Hidalgo have already spoken out to give China's largest electric car maker more room on their territory. According to Reuters, the new production center will have an annual production capacity of 150,000 units and is aimed at increasing the company's sales in the local market.
BYD has been selling cars in this country for less than 12 months. According to Bloomberg, Roberto Arrechedera Pacheco, head of Jalisco's Department of Economic Development (Sedeco), suggested in an interview that the Chinese company sent a delegation of executives to meet with state officials a few days ago. “The company did a very detailed analysis of how many education centers there are and how many people are close to where they could set up a factory,” a state official told authorities.
José Zozaya, president of the Mexican Automotive Industry Association (AMIA), acknowledged that talk of China's interest in building an assembly plant in Mexico is already common in this sector. “No investment from any company has ever come to fruition. It's good to see such strong investment appetite. I hope it will lead to investments that will create good jobs,” he says. Experts in the field point out that the entry of Chinese brands into the Mexican market is part of a global trend, as Asian producers need to find new markets in the Middle East and Latin America.
AMIA's executive director recognizes that the expansion of Chinese cars in Mexico has changed the marketing dynamics, making price competition more direct with Western cars. “They have clearly influenced the Mexican market through more attractive prices, very attractive models and designs, and extended warranties. It's the way they buy and the market will grow,” he says. . Zozaya notes that the Chinese car hub in the Mexican market still needs to improve its auto parts supply chain to avoid months-long delays with customers, as is happening in other parts of the world. It has recognized.
Automotive tycoon and former Nuevo León economy secretary Fernando Turner, BYD and other Asian auto parts companies see Mexico as a thriving market that could spearhead the Latin American market. He did not rule out the possibility that these Chinese moves are part of a strategy to triangulate trade flows to the United States through Mexico to circumvent restrictions by Washington. “The goal may be the United States, but not in the long run,” he said. In any case, Turner warns that it will not be so easy for Chinese assembly companies to enter the U.S. market on a large scale, as they have many protections in place for their own producers.
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