Whereas the U.S. continues to limit Chinese language electrical autos from coming into its market, its neighbors are more and more embracing inexpensive and well-made Chinese language EVs.
The newest model to indicate curiosity in capitalizing on the rising Latin American EV market is MG Motor. The previous British model is owned by China’s state-owned SAIC Motor, and it now plans to ascertain a producing facility and a analysis and improvement heart in Mexico.
The specter of the Mexico backdoor.
U.S. automakers worry that low-cost and well-made Chinese language EVs, that are already flooding Mexico, may additionally enter the U.S. if these manufacturers set-up crops within the nation. Whereas U.S. may very well be a profitable marketplace for them, it’s not the one nation they’re excited about. They see incomes rising in South America and Latin America as nicely, the place they plan to broaden no matter America’s protectionist insurance policies.
By increasing additional into Mexico, the place it already sells fashions just like the all-electric MG4 and the MG3 hybrid, it could have the ability to “not solely produce autos, however to additionally produce market intelligence particularly designed for and by Latin America,” nation lead Zhang Wei mentioned in a press release.
The automaker mentioned the Mexico plant, whose development time and site particulars weren’t revealed, would assist the SAIC Group develop and broaden into the Caribbean and Latin America. The enlargement would additionally permit MG Motor to launch its luxurious model, IM, in these markets, one thing the automaker mentioned is on the playing cards.
MG Motor already has crops in China, Thailand and India. Plus it is planning to construct a manufacturing unit in Europe, the place it’s the best-selling Chinese language model with practically 128,000 items offered within the first half of 2024, as per Dataforce numbers reported by Automotive Information.
Mexico is rising because the hotspot in North America for Chinese language EVs. Manufacturers like BYD and Chery Car already promote automobiles within the nation. Reuters reported that one in 10 automobiles offered in Mexico final yr had been Chinese language. Given the tempo of Chinese language investments within the nation, that share will probably proceed to develop.
Tesla additionally plans to construct a manufacturing unit in Mexico, however these plans are on pause as the corporate awaits the end result of the presidential elections in November.
If Donald Trump will get elected, it could actually harm the U.S. auto trade. He has vowed to amend the U.S. Mexico Canada (USMCA) free commerce settlement and slap 100-200% tariffs on automobiles made in Mexico. A ton of automobiles offered within the U.S. are made in Mexico, together with these from Normal Motors, Ford, Mazda, Nissan, BMW and numerous others.
These automobiles needs to be made within the U.S., he mentioned on the Republican Nationwide Conference, implying that he would permit Chinese language carmakers to construct factories within the U.S. Mexico, nevertheless, not too long ago indicated that it was distancing itself from Chinese language manufacturers and had reportedly halted talks with BYD after stress from the U.S.