China’s Great Wall eyes Mexico plant

Chinese vehicle maker Great Wall Motor is considering building an automotive plant in two Mexican states hit by US President Donald Trump’s drive to make US companies invest at home, sources said.

Great Wall Motor, which describes itself as China’s largest sports utility vehicle and truck manufacturer, is interested in Nuevo Leon in northern Mexico or the central state of San Luis Potosi, three people familiar with the matter said.

Under pressure from Trump to keep jobs in the US, Ford Motor cancelled a $1.6bn plant in San Luis Potosi in January, while heating and air-conditioning firm Carrier scaled back plans in December 2016 to move production to Nuevo Leon.

Great Wall Motor officials met with Mexico’s top rail firms Ferrocarril Mexicano, part of Grupo Mexico, and Kansas City Southern de Mexico to evaluate the states’ connectivity, according to a source and two documents seen by Reuters.

One of the sources said the company was in direct talks with Nuevo Leon’s government.

Another source said the vehicle maker was also eyeing a US-based plant, but gave no detail on locations.

A senior Great Wall Motor executive, speaking on condition of anonymity, said the choice between US and Mexican locations would depend on trade issues involving the US, Mexico and China.

Great Wall Motor and Ferromex did not immediately respond to requests for comment. A spokesman for Kansas City Southern de Mexico confirmed Great Wall Motor officials had met the company.

A pledge by the Chinese firm could bolster Mexico’s efforts to reduce dependence on US trade and investment as Trump threatens to rip up the North American Free Trade Agreement and rails against US firms moving jobs south.

A PLEDGE BY THE FIRM COULD BOLSTER MEXICO’S EFFORTS TO REDUCE DEPENDENCE ON US TRADE AND INVESTMENT

China has traditionally invested little in Latin America’s second-largest economy, but there are signs this could be changing. In February, China’s Anhui Jianghuai Automobile and distributor Chori Company unveiled plans with a firm partowned by Mexican tycoon Carlos Slim to invest more than $200m in a plant in Hidalgo.

According to one of the sources, construction on the Great Wall Motor plant could get under way in 2018. It would produce about 250,000 cars a year for the US and Mexican markets.