Eight Mexican states compete for Chinese automotive plant

Coahuila, Puebla, Nuevo Leon, Yucatan, Quintana Roo, Sonora, Hidalgo and Guanajuato compete to attract a significant investment from Chinese automaker BAIC, which is planning to install a manufacturing plant in Mexico.

BAIC Group, officially Beijing Automotive Industry Holding Co., Ltd., is a Chinese state-owned enterprise and holding company of several automobile and machine manufacturers that arrived to Mexico in June 2016. 

Since May 2017, the company operates an assembly line for D20 and X25 models in Veracruz, which arrive from China in Complete Knock-Down (CKD) kits, that means the vehicle comes unassembled in the form of individual parts and is completed into a finished car in the Mexican facility.

Now the company is looking to establish a manufacturing plant. Samuel Echeverria, operations director of BAIC, said in an interview to El Universal

The plant will manufacture combustion engine vehicles for the Mexican market as well as Central and South America, and electric vehicles for the North American market. Currently BAIC is marketed in Chile, Peru, Colombia, Argentina and Venezuela.

“It would be a plant with the total manufacture of the vehicle, from stamping, casting, painting and assembly. BAIC invited eight governors to China and made this offer to install a plant. We will be making the announcement mid-year. In the first instance, it will be to support operations in Central and South America and in the meantime for exports to North America,” Echeverria said.

The company currently evaluates the incentives offered by each of the states in Income Tax, property tax, water consumption. In addition to the surface, they’re considering which one of those states offers logistics, because an important part of the production would be exported to Central and South America. “Rail, land and sea routes are required to facilitate this operation,” said the official.

BAIC also wants to be near the industrial parks of other automakers to increase the content of local parts in their cars.

MexicoNow

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