Two Chinese automakers — BYD and Geely — are among three finalists competing to purchase a car manufacturing plant in the north-central state of Aguascalientes, according to an exclusive report published by the Reuters news agency.
The finalists — Vietnamese EV maker VinFast is the third competitor — were selected from among nine participants, including Chinese automakers Chery and Great Wall Motor.
“México no solo es un mercado clave, es parte del futuro de BYD”.
Stella Li, vicepresidenta ejecutiva global de BYD, confirma que la marca ya prepara sus próximos pasos en nuestro país, incluyendo la llegada de Denza, su firma de lujo eléctrica. En entrevista con Automóvil… pic.twitter.com/DoyxCb2iOS
— Automóvil Panamericano (@AutomovilMex) December 10, 2025
Mexico is a major export market for BYD and Geely as Chinese automakers have collectively boosted their market share from zero in 2020 to about 10% last year.
The Aguascalientes factory, originally a US $1 billion joint venture between Daimler and the Renault-Nissan Alliance that opened in 2017, is especially attractive, particularly since it comes with skilled workers, transportation infrastructure and a 230,000-unit annual capacity ready to go.
A win for either of the two Chinese contenders would give China a much-desired manufacturing foothold in a country where U.S. tariffs are fueling factory closures and layoffs, Reuters reported.
“After three decades of growth, vehicle exports to the United States fell nearly 3% in 2025” and an even steeper decline is likely this year if tariffs remain, Reuters reported. Additionally, “Mexico lost about 60,000 auto-industry jobs last year.”
While U.S. tariffs are hammering Mexico’s auto sector and Chinese investment “could generate much-needed jobs,” Mexican officials are understandably concerned that such a Chinese presence in Mexico “could inflame Washington and jeopardize [upcoming] North American trade agreement negotiations,” Reuters said.
Although the Mexican government can’t legally block a factory sale, officials are wary about Chinese production in Mexico, the report says.
Economy Ministry officials are reportedly pressuring Aguascalientes officials to delay any decision on the sale until after the trade talks are completed. The official joint review process of the USMCA trade agreement is scheduled for July 1, but formal discussions began last month.
The bid to acquire the plant is a significant step for BYD which has sought to build a new factory in Mexico for years.
Just last year, China’s Ministry of Commerce suspended approval of a BYD deal for a massive new plant that would have produced up to 500,000 vehicles annually, citing concerns that BYD’s proprietary technology could leak to US competitors.
Mexico hit Chinese cars and other goods with 50% tariffs last year, which had the effect of incentivizing Chinese automakers to manufacture in Mexico. They view Mexico as a keystone in their strategy to sell cars in Latin America.
