BYD and Geely compete to buy Nissan–Mercedes Benz plant in Aguascalientes

Two of China's leading automakers, BYD and Geely, are among the finalists to buy a Nissan–Mercedes-Benz plant in Mexico, according to a person familiar with the matter, as China seeks to manufacture in a country where U.S. tariffs are causing factory closures and layoffs.

The two finalists emerged from among nine companies that expressed interest in acquiring the plant, including at least two other major Chinese manufacturers: Chery and Great Wall Motor, according to two sources familiar with the matter. Vietnamese electric vehicle manufacturer VinFast is the third finalist, one of the people said.

The interest from Chinese manufacturers, which had not been previously reported, represents a potentially significant shift in Mexico's automotive industry. For decades, U.S., European, and Japanese manufacturers have dominated the market, building primarily vehicles destined for the United States.

Now, Mexican officials face a balancing act. Tariffs imposed by the Trump administration are hurting Mexico's automotive sector, and Chinese investment could generate much-needed jobs, but they also fear that Chinese production in the Latin American country could irritate Washington and jeopardize this year's negotiations on the North American trade agreement, known as T-MEC.

The United States has effectively banned the sale of Chinese-brand vehicles, and President Donald Trump has accused Mexico of providing a back door for Chinese products to enter the U.S. market.

BYD, Chery, Great, Geely, VinFast, and Wall did not immediately respond to Reuters' inquiries on the matter.

BYD and Geely's manufacturing ambitions in Mexico underscore the explosive global growth of China's auto industry. BYD's vehicle sales have increased tenfold since 2020, and Geely's have doubled. Both companies sold more than 4 million vehicles last year, roughly the same as Ford.