Detroit (home of the US auto industry) can now breathe a sigh of relief.
Mexico decided to put a stop on giving special deals (incentives) to Chinese car companies that want to set up factories in Mexico. This also means they won’t be scheduling any more meetings with these companies.
The US was worried that China would start making cheap electric cars in Mexico and then sell them all over North America, including the US. This would hurt American car companies. The US lobbied Mexico (asked them nicely but firmly) to stop this from happening, and it seems to have worked!
Back in January, Mexican officials met with Chinese car manufacturers (OEMs) and said they wouldn’t give them special deals (incentives) to set up shop in Mexico. On top of that, Mexico also decided to put a pause on any future meetings with these Chinese companies. There haven’t been any meetings since January according to sources who didn’t want their names mentioned.
It’s being reported that the US government’s Trade Representative Office (USTR) spoke to Mexico about limiting Chinese investments in the car industry. This might be why Mexico changed its approach. This new policy comes after high-level talks between US and Mexican officials. Mexico decided to stop offering special deals (incentives) to Chinese carmakers who want to build factories in Mexico. They’re also not scheduling any more meetings with these companies for now.
There are already about 20 Chinese car brands selling imported electric cars in Mexico, like BYD. However, none of them have built factories in Mexico yet. BYD, a Chinese automaker, is still interested in building a factory in Mexico, even if they don’t get the best government deals. Some Mexican states are offering incentives to attract them.
So, while China isn’t completely shut out, things have gotten more complicated for them in the Mexican market. This is likely due to pressure from the US government.
