A manufacturing plant in Aguascalientes, Mexico, jointly operated by Mercedes-Benz and Nissan, could be sold to a Chinese automaker, with BYD and Geely among the leading contenders, according to people familiar with the matter cited by Reuters.
The facility is expected to become available after both partners decided to withdraw. Nissan said its exit reflects “broader strategic shifts,” while Mercedes-Benz is ending production tied to the GLB model assembled at the site. The factory has been an important export hub for vehicles produced in Mexico.
“The finalists emerged from nine companies expressing interest in acquiring the factory, including at least two other major Chinese manufacturers: Chery … and Great Wall Motor,” Reuters reported, citing two sources familiar with the discussions. Vietnamese electric-vehicle maker VinFast was also identified as a finalist.
Any acquisition by a Chinese company would come amid heightened scrutiny from the United States, which has imposed tariffs and trade restrictions affecting Mexico’s automotive exports. Mexican officials are said to be balancing the potential economic benefits of new investment and job creation against possible repercussions from Washington, which has accused Mexico of providing a back door for Chinese goods to enter the U.S. market.
Chinese automakers have expanded rapidly in Mexico since entering the market in 2020, capturing roughly 10% of annual vehicle sales. Mexico remains strategically significant as both a domestic market and a manufacturing base, although new U.S. tariffs have reduced export volumes. In 2024, about 2.8 million of the 4 million passenger vehicles produced in Mexico were sold in the United States, a figure that has since declined.
Mexico also maintains tariffs of around 50% on Chinese imports, encouraging manufacturers to localise production. Several Chinese companies have already announced investments, including Shanghai Yongmaotai Automotive Technology, which is building an auto-parts facility in Ramos Arizpe.
While the Mexican federal government does not have the authority to directly block the sale, economy ministry officials have reportedly urged regional authorities to delay major Chinese investments until trade negotiations with the United States conclude. None of the automakers involved have publicly commented on the potential deal.