A Chinese-Mexican tie-up on Wednesday unveiled plans to invest over $200 million in a Mexican car plant in a welcome sign of confidence even as threats from U.S. President Donald Trump have paralysed investment plans by U.S. companies.
Mexico's Giant Motors and China's Anhui Jianghuai Automobile (JAC Motor), along with distributor Chori Company Limited, will invest more than 4.4 billion pesos ($212.46 million) in an existing plant to build SUVs in the central state of Hidalgo, state governor Omar Fayad told a news conference.
Up to 10,000 vehicles could be produced at the plant within the next four years, Fayad said, adding JAC's SUV S2 and SUV S3 would be the first vehicles to be assembled.
Giant Motors, an auto manufacturer, is partially owned by Carlos Slim's Grupo Financiero Inbursa (GFINBURO.MX).
The outlook for Mexico's car industry has been racked by uncertainty since the election of Trump, who has threatened to impose punitive tariffs against carmakers in Mexico seeking to sell to the United States.
At a news conference last week, however, billionaire Slim said businesses should not be worried if Trump's policies led to the collapse of the NAFTA free trade agreement, saying he saw opportunities for his country in Trump's economic policies.
Speaking at the news conference, Mexico's Economy Minister Ildefonso Guajardo said the investment had arrived at a crucial moment for Mexico, which has said it needs to diversify its exports to other markets outside of the United States.
"We as a nation are analysing the challenges that the world presents us," he said.
Governor Fayad said the tie-up may also produce electric cars.