BAIC's X25, now being assembled in Veracruz. BAIC's X25, now being assembled in Veracruz.

Chinese firm opens Veracruz auto plant

BAIC is assembling two models in partnership with Mexico's AT Motors

Chinese auto maker BAIC was reported in April to be planning on assembling vehicles in Mexico. Yesterday, six weeks later, the inauguration of its assembly line took place in Puente Nacional, Veracruz.

The company chose to work with AT Motors, a Mexican firm that has operated two plants making commercial vehicles for the last 10 years.

BAIC invested US $30 million in the Veracruz facility, whose output will be 6,000 units a year to begin and up to 30,000 by 2019. It employs 60 people now but will expand to 500 at full capacity.

The plant will produce the auto maker’s D20 model in sedan and hatchback versions and the X25 sport-utility model.

Production will serve the domestic market but exports to South America are planned.

The vehicles’ bodies and most of the components are being shipped by container from China to the nearby port of Veracruz, with mechanical and external parts being assembled in Mexico.

One-hundred containers are currently arriving every month via the Panama Canal, each one holding six vehicle bodies and components, from tires to motors, ready for assembly.

In order to export the vehicles, AT Motors will be looking for local suppliers of various parts so as to meet regional trade rules regarding content.

“Colombia, for example, asks for 50%,” said Bernardo García, the firm’s general manager, referring to the proportion of components that must be regionally manufactured.

That figure is currently 18%, he said.

BAIC began selling its vehicles in Mexico last year through Grupo Picacho, which expects to have 20 dealerships operating by the end of the year. It sold 300 units in the first quarter and predicts sales of between 1,000 and 2,000 for the year, which is minuscule in relation to the total of new vehicle sales in Mexico.

Last year saw a record 1.6 million units sold, up 18.6% over 2015. Nissan led the way, selling 401,000 vehicles.

Source: Expansión (sp), El Financiero (sp), Motorpasión México (sp)

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