Chinese Automakers BYD and Geely Compete for Nissan-Mercedes Plant in Mexico

Chinese automakers BYD and Geely are among the finalists to acquire a Nissan-Mercedes-Benz joint venture plant located in Aguascalientes, Mexico. This plant, which has a production capacity of 230,000 vehicles annually, is being sold as part of Nissan's global restructuring efforts, which include closing several production facilities due to financial losses. The competition for the plant also includes Vietnamese electric vehicle maker VinFast, with the three companies selected from a pool of nine interested parties, including other Chinese manufacturers like Chery and Great Wall Motor.

ElectrekSouth China Morning PostChina’s BYD and Geely eye Mexico plant in bid for North American foothold

The bid comes at a time when U.S. tariffs on auto imports are significantly impacting Mexico's automotive sector, leading to factory closures and job losses. The Trump administration's tariffs have created a challenging environment for manufacturers, prompting Mexican officials to consider the potential benefits of Chinese investment, which could generate much-needed jobs. However, there are concerns that increased Chinese production in Mexico could provoke a backlash from Washington, complicating ongoing North American trade negotiations.

China’s BYD and Geely eye Mexico plant in bid for North American footholdElectrekSouth China Morning Post

The interest from BYD and Geely reflects the rapid growth of Chinese automakers in the Mexican market. According to AutoForecast Solutions, Chinese brands have increased their market share from zero in 2020 to approximately 10% in 2025. BYD's global vehicle sales surged tenfold since 2020, while Geely's sales also reached over four million vehicles last year, positioning them competitively against established brands like Ford.

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The acquisition of the Aguascalientes plant presents a strategic opportunity for BYD and Geely to establish a manufacturing presence in North America without the lengthy regulatory delays associated with building new factories. The plant's existing infrastructure and workforce make it an attractive option. However, the Mexican government is caught in a complex political situation, needing to balance economic incentives against potential U.S. retaliation. Reports indicate that Mexican authorities have been urged to delay Chinese investments until trade negotiations with the U.S. are concluded.

China’s BYD and Geely eye Mexico plant in bid for North American foothold

Business consultant Victor Gonzalez emphasized the economic necessity of attracting Chinese investment, stating, "The economic incentive is hard to ignore regardless of the political optics." Meanwhile, the Mexican economy ministry has quietly advised local authorities to exercise caution regarding Chinese automaker investments amid ongoing trade discussions with the U.S.

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While the potential benefits of Chinese investment in Mexico are clear, there are conflicting perspectives regarding the implications of such a move. Some analysts argue that the influx of Chinese manufacturing could lead to increased tensions with the U.S., while others highlight the urgent need for job creation in Mexico's struggling auto sector. The exact impact of these developments on U.S.-Mexico relations remains uncertain.

China’s BYD and Geely eye Mexico plant in bid for North American foothold

• “Business consultant Victor Gonzalez, who advises Mexican states on attracting Chinese investment, told Reuters that the economic incentive is hard to ignore regardless of the political optics.” — Victor Gonzalez, Business Consultant

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• “Chinese automakers’ market share in Mexico has jumped from zero in 2020 to about 10% last year.” — Source Unspecified

China’s BYD and Geely eye Mexico plant in bid for North American foothold

The outcome of this bid could significantly reshape the landscape of Mexico's automotive industry and influence the dynamics of U.S.-China trade relations.

China’s BYD and Geely eye Mexico plant in bid for North American foothold