Mexico’s auto industry could be facing one of its most significant structural shifts in decades. According to Reuters, Chinese automakers BYD and Geely, along with Vietnam’s VinFast, are finalists to acquire the former Nissan–Mercedes-Benz plant in Aguascalientes.
The information comes from sources familiar with the process cited by Reuters, signaling what could be a major turning point in a sector historically dominated by American, European, and Japanese manufacturers.
A Shift in Mexico’s Automotive Balance
According to Reuters, nine companies expressed interest in acquiring the facility, including two additional major Chinese automakers: Chery and Great Wall Motor. However, the final contenders are reportedly BYD, Geely, and VinFast.
The potential sale carries deep implications. For decades, Mexico has served primarily as a manufacturing hub focused on exports to the United States. That landscape changed after the administration of Donald Trump imposed a 25% tariff on vehicles manufactured in Mexico.
Data cited by Reuters shows Mexican vehicle exports to the United States fell nearly 3% in 2025, following three decades of steady growth.
Tariff Pressure and Factory Closures
The Aguascalientes plant — with capacity to produce up to 230,000 vehicles annually — is shutting down due to a combination of factors, with U.S. tariffs serving as the final blow, according to industry sources cited by Reuters.
Mercedes-Benz is relocating production of the GLB model to Hungary, while Nissan has discontinued production of the Infiniti QX50 and QX55 as part of a global restructuring.
The impact has been substantial: Mexico lost approximately 60,000 auto-industry jobs in 2025, according to government figures cited by Reuters.
Mexico’s Political Dilemma
Interest from Chinese manufacturers places the Mexican government in a delicate position.
On one hand, new investment could generate much-needed jobs in a struggling sector. On the other, officials fear increased Chinese manufacturing presence could complicate negotiations under the USMCA (T-MEC) trade agreement with the United States.
Reuters reports that Mexico’s Economy Ministry has quietly urged state authorities to delay Chinese auto investments until trade talks with Washington conclude.
The United States has accused Mexico of acting as a “back door” for Chinese goods. The White House told Reuters that trade barriers are rooted in national security concerns and subsidized Chinese overcapacity.
China Accelerates Global Expansion
The interest in the Mexican plant underscores the explosive growth of China’s auto industry. BYD has increased its vehicle sales tenfold since 2020, while Geely has doubled its output. Both companies sold more than 4 million vehicles last year — roughly comparable to Ford.
In Mexico, Chinese brands have grown from zero market share in 2020 to nearly 10% of the market by 2025, according to estimates from AutoForecast Solutions.
Mexico sells approximately 1.5 million vehicles annually, making it an attractive platform for expansion across Latin America, particularly in the hybrid and electric vehicle segments.
A New Industrial Map for Latin America?
Although the United States has effectively blocked the direct sale of Chinese-brand vehicles within its borders, China sees Mexico as a strategic gateway to strengthen its presence in Latin America.
The Aguascalientes plant, opened in 2017, offers ready-built infrastructure, a skilled labor force, and established logistics networks. According to one source cited by Reuters, China’s Ministry of Commerce is aware of the interest and has not objected.
For some analysts, Chinese investment could represent a lifeline for Mexico’s auto sector.
A Defining Moment for 2026
The potential acquisition of the Nissan–Mercedes plant in Aguascalientes is more than a corporate transaction. It signals that the global automotive chessboard is shifting.
As the United States hardens its trade stance and Europe adjusts its industrial strategy, China is accelerating its global footprint. Mexico, caught in the middle, faces a strategic choice: protect its trade relationship with Washington or open the door to a new industrial chapter with Beijing.
In that geopolitical balancing act, Aguascalientes may become the epicenter of Latin America’s next automotive realignment.
