Chinese automakers prioritize profitability over expansion

The rapid expansion of Chinese automakers in Mexico has entered a period of adjustment. After a massive wave of dealership openings between 2021 and 2022, Asian brands began to rethink their business strategies in the face of a more competitive market, slower growth rates, and mounting pressure on profitability.

The number of dealerships selling Chinese vehicles in Mexico has dropped from around 600 sales outlets in the middle of last year to about 400 today—a reduction of approximately 200 dealerships in one year.

This shift reflects a change in strategy, now aimed at moving beyond the race to achieve the widest possible coverage and focusing instead on building more efficient and profitable operations. The main reason behind this adjustment is that the growth model—based on rapidly opening dealerships—failed to generate the sales volumes needed to cover the distributors’ operating costs.

In recent years, brands such as Chery Automobile, JAC Motors, Jetour, and other Chinese automakers sought to rapidly expand their presence in Mexico through extensive dealer networks.

The strategy allowed the brands to achieve recognition and territorial presence in a short time, but the growth in sales outlets was not accompanied at the same pace by the sales needed to make each location profitable.

Added to this pressure was a new factor: the increase in import tariffs, with vehicles from China facing import tariffs of up to 50%—a measure that put further pressure on the companies’ profit margins.