Feb 12 (Reuters) — Two of China’s leading automakers, BYD and Geely, are among the finalists vying to purchase a Nissan–Mercedes-Benz plant in Mexico, according to a person familiar with the matter, as China seeks a manufacturing foothold in a country where U.S. tariffs are fueling factory closures and layoffs.The finalists emerged from nine companies expressing interest in acquiring the factory, including at least two other major Chinese manufacturers: Chery and Great Wall Motor, according to two sources familiar with the matter. Vietnamese electric-vehicle maker VinFast is the third finalist, one of the people said.
The interest from Chinese automakers, which has not been previously reported, heralds a potentially major shift in Mexico’s car industry. For decades, U.S., European and Japanese automakers have dominated, mostly building U.S.-bound vehicles.
Now, Mexican officials face a balancing act. Trump administration tariffs are battering Mexico’s auto sector, and Chinese investment could generate much-needed jobs. But Mexican officials also fear that Chinese production in Mexico could inflame Washington and jeopardize this year’s North American trade-agreement negotiations.
The United States has effectively banned Chinese-brand vehicle sales, and President Donald Trump has accused Mexico of providing a back door for Chinese goods to enter the U.S. market.
BYD, Geely, Chery, Great Wall and VinFast did not comment for this story.
The Mexico-manufacturing ambitions of BYD and Geely underscore the explosive global growth of China’s auto industry. BYD’s vehicle sales have jumped ten-fold since 2020 and Geely’s have doubled. Both sold more than 4 million vehicles last year — about as many as Ford.
Mexico is a major export market for BYD, Geely and other Chinese automakers, who collectively have boosted their market share from zero in 2020 to about 10% last year, according to an estimate from consultancy AutoForecast Solutions. Mexico has about 1.5 million car sales annually.
GOVERNMENT SEEKING TO STALL
While Mexico can’t block a factory sale, economy ministry officials have quietly urged state authorities to stall Chinese automakers’ investments until it completes U.S. trade talks, two government sources said.
U.S. trade barriers are rooted in national and economic security concerns, a White House spokesperson said. «The issue here is subsidized Chinese overcapacity pushing Chinese firms to dump excess production into other markets,» the spokesperson said.