China's BYD Considers Establishing Electric Vehicle Factory in Mexico... Aggressive Overseas Expansion

Following Brazil... Focus on Establishing US Export Hub
Limitations Due to Slowing Sales Growth in China

BYD, the world's largest electric vehicle manufacturer, is accelerating efforts to establish overseas bases. This move aims to find a breakthrough for sustained growth amid a slowdown in electric vehicle sales in China. In particular, BYD is focusing on the Latin American region following Brazil and appears to be creating a U.S. export hub.

On the 13th, Nihon Keizai Shimbun published an interview with Joe Zhou, BYD's Mexico representative, reporting that BYD is considering electric vehicle production in Mexico. He explained, "Overseas production is essential for global brands," adding, "Mexico is a large and important market."

[Image source=AFP Yonhap News]

According to the report, BYD has already begun negotiations with local governments and municipalities regarding site conditions. Potential factory locations mentioned include the northern state of Nuevo Le?n, the Baj?o region, and the southern Yucat?n Peninsula.

Mexico's automobile sales reached 1.36 million units last year, a 24% increase compared to the previous year. According to local media, sales of Chinese cars exceeded 120,000 units, surging 60% during the same period. Leading companies include MG, part of the Shanghai Automotive Group, Chery Automobile, and Anhui Jianghuai Automobile Group.

As 'nearshoring'?establishing production bases close to the U.S.?gains momentum, Mexico is one of the primary beneficiaries. Its proximity allows land transportation to the U.S., helping to avoid logistics disruptions, and it also benefits from incentives under the U.S. Inflation Reduction Act (IRA). Companies such as GM, Kia, and BMW have also announced electric vehicle investment plans in Mexico. Additionally, wages are about one-fourth to one-fifth of those in other North American countries, and land prices are relatively low, which are considered advantages.

[Image source=Reuters Yonhap News]

China, feeling limits in domestic growth, is becoming even more proactive. In the last quarter, BYD surpassed Tesla in electric vehicle sales volume, but most of these sales were domestic, which is a limitation. Last year, overseas sales accounted for only 8% of the total. According to the Mexican government, China invested $587 million in Mexico in 2022, a 50% increase compared to the previous year.

Meanwhile, BYD is pushing to start operations at a manufacturing plant in Taiwan within the year and announced plans at the end of last year to build a new plant in Hungary, aiming to complete it within three years. It is also establishing a new factory in Brazil.

This content was produced with the assistance of AI translation services.