23:47 12-02-2026

Chinese automakers compete for Nissan-Mercedes plant in Mexico

Chinese automotive giants BYD and Geely are among the three finalists vying to purchase the COMPAS plant in Aguascalientes, a joint venture between Nissan and Mercedes-Benz with an annual capacity of 230,000 vehicles. The interest from Chinese corporations marks a new phase in the global redistribution of auto manufacturing: U.S. tariff policies are pushing producers to seek alternative routes, and Mexico is emerging as a key hub.

According to Reuters, out of nine companies that expressed interest, BYD, Geely, and the Vietnamese EV brand VinFast have reached the final stage. Chery and Great Wall also submitted applications to participate. The plant is shutting down due to declining demand, U.S. tariffs, and strategic shifts by Nissan and Mercedes, creating an opportunity for new players.

Why Mexico has become a target for Chinese brands

The U.S. has imposed 100% tariffs on Chinese cars, effectively banning their sales. However, the Mexican market remains open, and brands from China have already captured about 10% of local sales, whereas in 2020 they had no market share at all.

Manufacturing in Mexico allows companies to reduce supply costs to Latin America, minimize tariff barriers, and access skilled labor and established logistics. In practice, this means a strategic foothold in a growing market. Yet Mexico itself is balancing under pressure from Washington: the country needs investments and jobs, but there is a risk of worsening trade negotiations with the U.S.

What is happening with the Nissan-Mercedes plant

Currently, Mercedes is moving GLB production to Hungary to avoid higher tariffs on U.S. shipments. Nissan is discontinuing the QX50 and QX55, as well as a second factory near Mexico City, as part of a global restructuring. This detail matters because it highlights the broader industry shifts driving these changes.

U.S. tariffs have made exports from Mexico unprofitable, with the country losing 60,000 auto industry jobs in 2025. Against this backdrop, the Aguascalientes site has become highly attractive to new investors, offering ready infrastructure, trained personnel, and proven supply chains.

What comes next

A final decision is expected after trade talks between Mexico and the U.S. conclude. The local government has already asked regions to slow down Chinese investments until positions are aligned with Washington. Experts note that while politics plays a role, no Mexican state would turn down investments from Chinese auto giants, as they bring jobs, taxes, and a new chapter for the local auto industry.

If the deal goes through, Mexico could become a key export base for electric and hybrid vehicles from China, particularly for Latin American markets where U.S. tariffs are irrelevant. For buyers, this is important since it could reshape regional supply dynamics and competition.