GM's SAIC-GM-Wuling joint venture in negotiations for local production in Mexico
After a delegation visit to Mexico and Brazil, reports claim GM's joint venture in China, SAIC-GM-Wuling, is in advanced negotiations to begin manufacturing vehicles in Mexico, following the introduction of new tariffs on imports to the country that came into effect at the beginning of the year.
According to reports, SAIC-GM-Wuling's executive deputy general manager Huang Yaosong led a delegation to visit GM's engineering centre and manufacturing plant in Toluca, Mexico, in March 2026. During the visit, the delegation held meetings with General Motors de México and regional partners to outline plans for future business development, as well as to discuss market trends, regulatory changes, customer demand and product performance.
Whilst at the plant, the delegation reviewed its operations, quality management and aftersales services, identifying areas for product optimisation and technical improvement.
It is understood that the joint venture, having evaluated Mexico as a potential manufacturing base, is in advanced talks to manufacture vehicles in Mexico.
“The new project in the Mexican market is expected to become a major driver of future business growth," Huang said. "We must do everything possible to ensure a smooth and effective implementation.”
Impact of new tariffs as Mexico tops table of Chinese vehicle export destinations in 2025
The delegation's visit to Mexico is very timely, with Mexico having recently introduced 50% tariffs on all countries it doesn't have a Free Trade Agreement (FTA) with. The tariffs, which came into effect on January 1, 2026, apply to several countries – including China – and come ahead of the US-Mexico-Canada Agreement negotiations due to take place later this year.
The introduction of these tariffs undoubtedly provides an incentive to explore local production for automakers in China currently reliant on exports to reach key markets in Mexico and South America.
According to data from the China Passenger Car Association (CPCA), Mexico was the top destination for new vehicle exports from China in 2025, with China exporting 625,187 vehicles to Mexico in FY 2025.
Although data on the destination of finished vehicle exports from China in 2026 is not currently available, CAAM data does show a 45% year-on-year increase in finished vehicle exports from China in January 2026 to 681,000 units and a 52% increase in February 2026 to 672,000 units.
If, as 2025 data would suggest, Mexico remains a significant export destination for Chinese OEMs in 2026, the costs of the new tariffs will quickly add up, hence the need to explore how local production might support their long-term growth goals in the region.
And in terms of vehicle production in Mexico so far this year, data points towards increases in production, exports and sales in March 2026. According to Mexico's National Institute of Statistics and Geography (INEGI), the country manufactured 343,520 light vehicles last month (a 2.5% increase on March 2024) and exported 310,205 units (representing a year-on-year increase of 4.2%).
Although the true impact of Mexico's new tariffs on its automotive industry remain to be seen, its certainly no surprise that more automakers from China are weighing up local production strategies.
Mexico as a gateway into South America
There are several benefits of local production in Mexico, from decreased logistics costs to the elimination of tariff costs, but another is access not only to Mexico's domestic market but to other markets in South America.
As well as visiting Mexico, the SAIC-GM-Wuling delegation also paid a visit to Brazil and reportedly held discussions with General Motors South America around market landscape, segment trends and the development of new energy vehicles. They also visited dealerships in São Paulo to understand consumer demand and regional competition.
The Brazilian Association of Automotive Vehicle Manufacturers (ANFAVEA) recently reported that the country's vehicle sales in March 2026 reached 269,483 units – a 37.8% increase in sales on the previous March.
With markets like this growing and appetite for Chinese-made new energy vehicles strong in South America, bringing vehicle production closer to the region could help SAIC-GM-Wuling not only reduce its logistics costs significantly, but also bolster its supply chain resiliency by reducing its exposure to shocks impacting long-distance vehicle shipments.
