THE Chinese car manufacturers quickly settle into Mexico, causing a sensation in the local market. Since the pandemic, these companies have taken a significant share of the market, accounting for nearly 30% of sales in 2023. Brands like BYD And M.G. are expanding with attractive models at competitive prices. However, despite their success, Mexico has refused to provide subsidies for Chinese electric vehicles under pressure from the United States, complicating their ambitions. Nevertheless, several of them continue to explore the option of building assembly plants in the country, targeting not only the Mexican market but also the American market in the long term.
The global automotive landscape is transforming at high speed, and Chinese car manufacturers are taking an increasingly important place in Mexico. These brands, notably BYD and MG, are establishing themselves thanks to competitive prices and attractive products, while keeping an eye on the huge American market. In this article, we will explore how these Chinese players are succeeding in making a place for themselves in Mexico and what their ambitions are for the future.
A Strategic Entry into Mexico
Since the start of the pandemic, Mexico has become a strategic entry point for Chinese cars. With almost 29% of imported vehicles originating from China, the country is attracting the attention of Asian brands looking to conquer Latin markets. This success can also be explained by the desire of the Mexican government to become a center of automobile production, thus taking advantage of its trade agreements with the United States.
The Advantages of the Mexican Factory
Mexico offers undeniable advantages for builders, including reduced production costs and a competitive workforce. This country also has a strong infrastructure base, facilitating import and export logistics. The result? Brands like BYD And M.G. settle in Mexico to locally assemble their models, making their offer even more attractive to the consumer.
A Refusal of Subsidies
However, not all doors are open. The Mexican government recently refused grants to Chinese manufacturers against a backdrop of American pressure. The move highlights growing tensions around the dominance of electric cars in the country. Mexico has thus suspended its discussions with brands like XPeng, showing that there are limits to the latter’s ambitions.
Growing Presence in the Territory
Despite these challenges, the presence of Chinese manufacturers in Mexico does not weaken. Around twenty of them, including well-known names like BYD And M.G., continue to penetrate the market. For example, the model Dolphin Mini by BYD attracts Mexican consumers with its attractive price and performance. As Chinese car sales reached 30% of total sales in 2023, competition is intensifying.
The American Vision
Chinese manufacturers are looking beyond the Mexican market. Entry into the American market represents a golden opportunity, but it is fraught with pitfalls. The American market is very competitive and well established, but the appeal of Mexican manufacturing could work in their favor. By benefiting from reduced customs tariffs thanks to the USMCA agreement, they could offer vehicles at very competitive prices.
A Booming Electricity Market
With the growing demand for electric cities In North America, Chinese manufacturers are also well positioned to respond to this trend. They have the ability to make their electric cars more accessible thanks to their lower cost structure. This could be a game-changer in their race to the US market.
In a rapidly evolving automotive market, Chinese manufacturers establish strategies to find a place in Mexico while putting blinders on the opportunities offered by the American market. Their production capacities, pricing strategies and long-term vision could shake up the automotive landscape in the years to come.
To learn more about the rise of the automobile in Mexico, check out this article on Forbes and discover how these brands are redefining the rules of the game with The World.’
- Growing presence: 20 Chinese manufacturers in Mexico, including BYD and MG.
- Implementation strategy: Assembly plants considered to strengthen their position.
- Penetration rate: 30% of car sales in Mexico in 2023.
- Competitive costs: Reduced prices promoting the appeal of electric vehicles.
- Political tensions: Refusal of subsidies for electric cars imposed by Mexico.
- North American ambitions: Chinese manufacturers are targeting the American market via their Mexican base.
