Chinese language firm Yongmaotai Automotive Expertise has introduced an funding of round US $63 million to construct an auto elements plant within the northern border state of Coahuila.
The Chinese language information outlet Yicai World first reported the deliberate funding in July, saying that Yongmaotai had introduced its intention to spend 450 million Chinese language yuan (US $63.1 million) on a brand new manufacturing unit in Mexico with a purpose to “mitigate the affect of shifting international commerce insurance policies on its European and U.S. clients’ provide chains.”
Yicai World mentioned that Yongmaotai, a Shanghai-based firm that focuses on the manufacturing of aluminum auto elements, introduced that its two Singaporean items would collectively arrange “a Mexican mission firm” to put money into the brand new plant and oversee its building and operations.
Yongmaotai mentioned that the manufacturing unit would seemingly take two years to construct.
In September, the Mexican Chamber of Commerce in China (MEXCHAM) described the deliberate mission as “a wise manufacturing base for automotive elements in Mexico.”
MEXCHAM mentioned that the mission is positioned in Coahuila, however didn’t specify the place within the state.
It mentioned that the plant may have “a deliberate annual manufacturing capability of 25 million light-weight automotive elements, together with turbocharger housings.”
MEXCHAM additionally mentioned that “the development interval is anticipated to be two years, with manufacturing set to start within the second quarter of 2027.”
It mentioned that in keeping with Yongmaotai’s “2025 semi-annual report,” the mission has “already been efficiently initiated.”
“Approval and submitting procedures are presently underway in China, Singapore and Mexico, whereas the registration of the Mexican subsidiary can also be in progress,” MEXCHAM mentioned on Sept. 18.
China launches commerce investigation into Mexico’s deliberate tariff hike
The enterprise chamber famous that “Mexico enjoys zero-tariff advantages for auto elements exports to the USA” as it’s social gathering to the USMCA free commerce pact, which is scheduled to be reviewed in 2026.
MEXCHAM mentioned that Yongmaotai’s funding choice “not solely represents a major step within the firm’s international technique but additionally injects new vitality into China-Mexico automotive trade cooperation.”
Yongmaotai might keep away from US and Mexican tariffs by manufacturing in Mexico
Based on Yicai World, Yongmaotai mentioned in July that the funding in Mexico will “assist scale back the adversarial results of adjusting worldwide tariff insurance policies” on the provision chains of its shoppers in Europe and the USA.
Having a plant in Coahuila would permit Yongmaotai to keep away from tariffs on Chinese language items imposed by the USA, supplied that these elements adjust to USMCA guidelines, which might doubtlessly change after subsequent yr’s evaluate.
It could additionally permit Yongmaotai to keep away from Mexico’s tariffs on items from China, that are slated to rise within the close to future.
The corporate provides elements to automakers, together with Common Motors and Volkswagen, each of which manufacture automobiles in Mexico, a significant auto-producing nation, and within the U.S.
Yongmaotai has additionally introduced a plan to construct a $50 million plant in Indonesia as a part of a method to diversify its manufacturing base.
Greater than 30 Chinese language auto elements producers already function in Mexico, nearly all of which export their merchandise to the USA. Some had been reportedly lured to Mexico by Tesla, which in early 2023 introduced a plan to construct a “gigafactory” close to Monterrey, Nuevo León.
Nevertheless, it presently seems unlikely that Tesla will truly construct its proposed plant in Mexico. In July, Chinese language electrical car producer BYD, Tesla’s principal competitor, canceled its plans to fabricate automobiles right here.
Politicians in the USA and Canada have made important remarks about Chinese language funding in Mexico, which has elevated in recent times.
United States President Donald Trump has floated the potential of imposing hefty tariffs on automobiles made by Chinese language corporations in Mexico, a transfer aimed toward dissuading Chinese language automakers from opening crops right here. He has additionally mentioned that he needs to “renegotiate” the USMCA, quite than merely evaluate the pact he signed off on throughout his first time period as president.
With stories from Vanguardia, Cluster Industrial and Yicai World
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