Chinese Cars in Mexico: Navigating the Road Ahead

Chinese automakers have dramatically reshaped Mexico’s car market over the past seven years, growing from virtually zero presence to capturing more than 20% of all vehicle sales. The rapid expansion has introduced Mexican consumers to brands previously unknown in North America while challenging established manufacturers from the United States, Japan, and Europe.

China positioned itself as the leading supplier of imported light vehicles in Mexico between 2022 and 2024, with sales reaching 302,837 units in 2024, representing 20.2% of total light vehicle sales. This marks a meteoric rise from just 0.3% market share in 2017.

Major Players and Market Performance

The most successful Chinese brand remains MG Motors, which sold 60,128 units in 2023. The second-best performer was newcomer Chirey, with 38,484 units sold, representing a 350% increase in just one year after opening dealerships in 2022.

Other significant brands include BYD, JAC, Geely, Great Wall Motor, Omoda, Changan, and Jetour. JAC operates the only Chinese assembly plant in Mexico, producing electric vehicles including the E10X, E J7, and E Sei4 Pro models. Some are competing directly with more established brands such as Tesla and Audi.

Mexican consumers have embraced Chinese vehicles across multiple segments. SUVs and minivans represent the largest share of Chinese vehicle sales, with top models including the MG 5, Chirey Tiggo, Omoda C5, and JAC Frison.

Customer Reviews: Mixed Reception

Consumer response to Chinese car brands has been varied, with price serving as the primary attraction. Miguel Reyes, a 71-year-old retiree, said choosing a Chinese car was “simple arithmetic.” He paid about 550,000 pesos ($27,057) for his vehicle, while a similar model from a traditional brand would have cost $40,000 to $50,000.

However, customer satisfaction surveys reveal challenges. Recent studies from J.D. Power showed that overall satisfaction with Chinese-branded cars was among the lowest in Mexico. Chinese brands scored 812 points out of 1,000 on the APEAL (Automotive Performance, Execution and Layout) scale, compared to Japanese brands at 899 and South Korean brands at 896.

The Federal Consumer Protection Agency (PROFECO) reports rising complaints about Chinese brands, with Chery (sold under the name Chirey in Mexico) and MG accumulating 181 complaints since 2021. Common issues include warranty disputes, manufacturing defects, poor repair quality, and problems with contract cancellations or product delivery.

Disrupting the Luxury Segment

Chinese manufacturers have successfully challenged premium European brands. The high-end market segment registered an 8.1% sales drop from January to November 2024, with Audi’s sales slumping 21.9% and BMW showing no growth.

The pricing strategy has proven effective across market segments. BYD offers an electric pickup truck for more than one million pesos ($50,000) but also sells a compact car for $17,000. Zeekr, a premium electric brand, sells luxury models for around $40,000.

Momentum Slows

After years of explosive growth, Chinese car sales in Mexico have decelerated significantly. Sales grew 9.8% in 2024, marking the first single-digit growth rate in four years, compared to previous annual increases of 103% in 2021, 128.4% in 2022, and 51.4% in 2023.

Industry analysts attribute the slowdown to multiple factors. “These complaints may stem from several factors: consumers’ lack of familiarity with handling conditions, maintenance and spare parts issues, and competition from well-established brands in the Mexican market,” said Eric Ramírez, LATAM Manager at Urban Science.

Geopolitical Pressures Mount

Trade tensions between the United States and China have created uncertainty for Chinese automakers in Mexico. During his campaign, President-elect Donald Trump suggested that China was building car factories in Mexico to sell vehicles in the United States, raising concerns about potential circumvention of U.S. trade restrictions.

Mexico raised tariffs on imported cars to 20% from 15% in October 2024, in what was widely seen as a reaction to growing sales of Chinese vehicles. The country also ended certain EV import incentives for non-trade-partner countries, including China, in September 2024.

Electric Vehicle Innovation

Many Chinese brands have gained traction through electric and hybrid technologies. Mexico’s electric vehicle market shows strong growth, with Chinese manufacturers playing a significant role in the transition to electrification. In Mexico City, electric vehicles are exempt from driving restrictions on smoggy days, making models like the BYD Dolphin Mini particularly attractive to urban consumers.

The Outlook for Chinese Cars in Mexico

Analysts expect the market share decline to persist through 2025, citing logistical hurdles, customer dissatisfaction, and growing geopolitical pressures. Despite challenges, Mexico remains China’s largest automotive export market worldwide, with 353,416 units imported in the first three quarters of 2024.

The success of Chinese automakers in Mexico reflects broader global automotive trends, as manufacturers from the world’s largest car market continue expanding internationally. Whether Chinese brands can address service quality concerns while maintaining competitive pricing will likely determine their long-term success in Mexico’s evolving automotive landscape.

The automotive industry continues to monitor developments in U.S.-Mexico trade relations and their potential impact on Chinese vehicle imports.