Wednesday, June 19, 2024

Chinese FAW cars to return to the Mexican market

FAW, a Chinese automaker that had previously entered the Mexican market in 2008 without success, is set to launch its cars in Mexico starting in March. 

The company will introduce four different models of its Bestune brand vehicles, including the B70 sedan, B70S crossover, and T77 and T99 SUVs. All will be equipped with either a 1.5- or 2.0-liter turbo gasoline engine. 

The Bestune T77 SUV is amongst the models that will be imported. (FAW)

Shanghai Auto Assembly Group (SAAG), a Mexican subsidiary of Mirage – an importer of air conditioners – will import the vehicles. Their launch is scheduled for March 14.

SAAG also plans to introduce the JIM brand pickups, owned by Jiangling Motors Corporation Group (JMC). The brand’s product range includes 4×2 and 4×4 models, with manual and automatic transmission.

The CEO of SAAG, Zaid Leyva, told the newspaper Expansión that the company seeks to offer unique features that differentiate them from other Chinese brands on the Mexican market. “We believe that we have found the right formula to provide something different to potential customers in Mexico,” Leyva stated.

When FAW first entered the Mexican market 16 years ago, it did so under the umbrella of Grupo Salinas, after reaching an agreement for the marketing of three models via the retailer Elektra: the F1, F4 and F5. 

FAW also plans to move it’s ELAM-FAW truck assembly business to Colima. (ELAM-FAW)

However, Grupo Salinas suspended the sale of FAW vehicles, resulting in the cancellation of the project and the termination of a deal with mechanic workshop Speedy for after-sales service.

This time around, SAAG will create a network of dealerships that groups of distributors will operate.

SAAG plans to open 15 to 20 distributors across Mexico City, Guadalajara and Monterrey by the end of 2024. It has already signed contracts with six distributor groups that will open the first SAAG dealerships. Twelve more groups are currently in the decision-making process.

SAAG will also launch a financial institution, SAAG Financial, to offer financing options with competitive rates.

In Mexico, FAW also has a partnership with the cargo truck manufacturer Latin America Truck Assembly (ELAM) known as ELAM-FAW. They have announced plans to move their current manufacturing plant located in Hidalgo, to expand production capacity in the country and reduce logistics costs. 

According to the Colima state government, ELAM-FAW  has signed a letter of intent with the state to install their assembly plant there, which will require an initial investment of 7 billion pesos (US $408 million).

Founded in 1953, FAW is one of China’s oldest and largest car manufacturers, and today also makes electric vehicles under the Hongqi, Bestune and Jiefang brands.

With reports from Milenio, Reforma and Expansión


Have something to say? Paid Subscribers get all access to make & read comments.
Chinatown area of Mexico City

How is an influx of Chinese commerce impacting Mexico City?

A recent series published by Reforma newspaper delved into how the "tsunami" of Chinese-owned shopping plazas and warehouses has affected locals.
Employees in an avocado processing plant in Michoacan move around large carts of avocados

US pauses Michoacán avocado inspections, citing agent safety issues

After two USDA inspectors reported an incident, the U.S. paused avocado inspections in Michoacán, Mexico's No. 1 exporter of "green gold."
Jorge Guajardo head shot

5 questions about investment in Mexico: An interview with former Ambassador Jorge Guajardo

Jorge Guajardo, former Mexican ambassador to China, answers five questions about FDI, nearshoring and Mexico's economic future.