Monday, May 20, 2024

Another Chinese car manufacturer has plans to build a plant in Mexico

Another Chinese carmaker has announced its plans to build a production facility in Mexico this year, soon after statements confirming that electric vehicle manufacturer BYD will build a plant in the country.

Jaecoo, owned by Chery Automobile Company, is looking at Durango and México state as potential locations for a new plant, according to an interview published by Milenio newspaper with Shawn Xu, Vice President International of Chery and CEO of Jaecoo International. He said the company seeks to export the cars produced in Mexico to other parts of the continent.

“Once installed, we will manufacture our vehicles and move them within the [domestic] market, and then possibly take them to other parts of the continent,” Xu said, adding that the brand “is here to stay.”

Chery is a car manufacturer founded in 1997 and headquartered in Wuhu, China. It entered the Mexican market in 2022 with the Chirey brand, followed by the Omoda brand in 2023.

This year, the company launched the Jaecoo brand, which includes the compact SUV Jaecoo 7 model. By Q2 or Q3 2024, it plans to launch a bigger SUV — the Jaecoo 8 — as the company is “confident” that the Mexican market will respond positively to its products.

“We have reports that the SUV market grew 10.8% in 2023 [in Mexico], which gives us an idea of what we can achieve,” Xu said.

Mexican actor and singer Alfonso Herrera stands next to a Jaecoo SUV
Mexican actor and singer Alfonso Herrera has taken on the brand ambassador role of “Mr. Jaecoo.” (Jaecoo.mx)

The company also plans to launch the Jaecoo 7 PHEV model, which, along with the Jaecoo 8, has a classic executive design which is different from that offered by Chery and Omoda.

Sales of Chinese cars in Mexico have been on an upward trend. In 2023, sales were up 63%, reaching a new record of over 129,000 Chinese units sold.

As for sales expectations, Gabriel Ríos, vice president of Jaecoo Mexico, told the newspaper Milenio that the company expects to sell between 5,000 and 8,000 units of the Jaecoo 7 model in 2024.

Miguel Mercado, head of after-sales at Jaecoo Mexico, explained that parts and logistics will be distributed in collaboration with logistics company DHL.

“In alliance with [DHL], we have more than 15,000 parts stored, in addition to a new warehouse of more than 6,000 square meters and with more than seven months of sales in inventory,” Mercado said.

Xu, in an interview with the newspaper Expansión, stated that Chery’s plan is to close the year with 40 total dealerships shared with the Omoda brand. This distribution strategy will enable Jaecoo to leverage Omoda’s already well-established infrastructure, allowing the brand to reach a larger pool of consumers.

As part of its new brand positioning strategy, the company has chosen Alfonso Herrera as its brand ambassador with the title “Mr. Jaecoo.” The Mexican actor and singer will appear in advertisements and will play a key role in the brand’s communication efforts.

With reports from Expansión and Milenio

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