Chinese Automaker's Plans for a Factory in Mexico Disrupted by US Political Factors | Carscoops

      Donald Trump's trade policies prompted BYD to reevaluate its plans, deciding to invest in Brazil rather than Mexico, its neighboring country.

      The Chinese automaker had been exploring three locations in Mexico for a new factory.

      BYD had initially halted its Mexican plans last year to await the results of the US election.

      The company is present in South America with its new plant in Brazil.

      Global growth strategies rarely proceed without complications, particularly when political and international trade factors are involved. For BYD, one of the fastest-growing automakers globally, a long-anticipated expansion into Mexico has been postponed.

      The reason behind this is a combination of changing geopolitical dynamics and apprehensions regarding U.S. trade policy, especially with Donald Trump potentially returning to the presidency. Nonetheless, the company is not entirely slowing down, having recently inaugurated its first factory outside of Asia in Brazil.

      As we reported last year, BYD was evaluating three locations in Mexico for a new factory, but paused its search in September to wait for the outcome of the 2024 U.S. presidential election, likely anticipating that Trump's victory could disrupt the current state of international trade. This is precisely what the 45th and 47th President has done.

      During her recent address at the launch of BYD's new factory in Brazil, executive vice president Stella La indicated that the rapidly advancing automaker is reassessing its approach.

      "Geopolitical issues significantly influence the automotive sector," she stated to Bloomberg. "Now everyone is reconsidering their strategies in other nations. We wish to wait for more clarity before making a decision."

      BYD's attempt to establish a presence in Mexico faced obstacles in March, even before President Trump announced extensive tariffs. That month, China’s commerce ministry postponed approval for the Mexican factory due to concerns that the automaker's technology might be accessed by the U.S.

      From a Standstill in Mexico to Advancements in Brazil

      While Mexico is currently off the table, BYD continues to progress in the region. The new facility in Camaçari, Brazil, is now operational and has potential for expansion. It currently manufactures up to 150,000 vehicles annually, with intentions to increase that capacity to 300,000 within two years.

      However, the site has not been free of controversy. Late last year, Brazilian authorities reported that some international workers at the facility were living under conditions comparable to modern slavery.

      In response, Li reaffirmed the company's dedication to improvement. Looking ahead, she stated that BYD will collaborate more closely with local partners to uphold labor and human rights standards.

      "We should take our time, step back from an emphasis on speed," Li emphasized. "It may take longer, but that's acceptable."