New Chinese car brands arrive in Mexico

Mexico’s Secretary of Economy indicates that in 2016, 10,443 vehicles were imported from the Asian country, of brands that seek to erase the bad image left by FAW, brought to Mexico in 2007 by Grupo Salinas.

You may remember the Chinese cars of the FAW brand, brought to Mexico by Grupo Salinas in 2007. However, due to the low levels of security they offered and the decline of the Mexican market due to the global crisis, they stopped being commercialized in 2009.

Eight years later, Mexico has witnessed the arrival of a new wave of brands from the Asian country. They have the challenge of changing the bad image that FAW left and that will seek to become important players in the market.

During the past year Mexico imported 10,443 Asian vehicles, which represented a 21.7% increase, compared to 2015.

At the beginning of April, Great Wall Motors, a Chinese automaker, told the governments of Nuevo León and San Luis Potosí of their interest in setting up an assembly plant in Mexico, adding to other Chinese companies such as BAIC and JAC, which are already expanding into Mexico.

Experts say that these Chinese brands are interested in an internationalization of their products and that Mexico is on their radar as one of the strongest markets in Latin America.

Between 2013 and 2016 the volume of new car sales in Mexico recorded historical levels and an average growth rate of 13%, well above the 3% observed in the rest of the world.

Brais Alvarez Gallardo, an analyst of J.D. Power Mexico, explained that the interest of the owners of that country has to do with the exponential growth that shown by the Mexican market in the placement of cars.

China is the fourteenth country selling cars to Mexico. In January 2017, 2 thousand 538 Chinese vehicles entered Mexico. The increase in the sale of Chinese cars in Mexico has been significant in the last 18 months. Information from the Secretary of Economy shows that during 2016 10,443 vehicles were imported from the Asian country, an increase of 21.7 percent compared to a year earlier.

Experts say that the greater arrival of these cars has to do with the growing demand of the Mexican public, because they find in them a technological attraction at an affordable price.

BAIC was the first Chinese brand to take on the challenge of overcoming the bad image left by FAW and entered Mexico in June 2016.

The firm reported to port authorities of Lázaro Cárdenas, Michoacán, that in the last 12 months (finished in March), it entered 1,017 cars to sell in Mexico.

One of its best-selling models is the D20, which costs $195 thousand 900 pesos, with 2 airbags and a yield of 17.4 kilometers per liter of gasoline. It is the direct competition of Nissan March, which in its basic version offers a yield of 17.7 kilometers per liter of fuel and a cost of $139 thousand 200 pesos.

The Chinese brand, which seeks to sell 3 thousand cars a year, gives 5 years warranty or 100 thousand kilometers, while the industry average is 3 years. In the segment, KIA provides a guarantee of 7 years and Hyundai 5 years.

JAC had a different strategy: to send the auto parts to its partner in Mexico, Giant Motors, which assembles them in its plant of Hidalgo, soon to sell the cars in the country.

Elias Massri, president of Giant Motors, said they are ready to open 5 new agencies this year, to sell 10 thousand cars in the next five years.

Source: www.elfinanciero.com.mx