In Mexico, budget-conscious buyers like Uber driver Patricia Gatica are turning to affordable cars made in China, such as the $17,000 Chevy Aveo, which offers impressive fuel efficiency at 48 miles per gallon, according to Bloomberg. This trend extends to electric vehicles from brands like BYD, highlighting how Chinese imports are reshaping the market south of the border while facing barriers in the US.

Rising Chinese Imports Drive Down Prices

Chinese car imports have surged in Mexico, accounting for almost one-fifth of total new car sales last year, surpassing shipments from the US, Brazil, India, and Japan. This figure likely understates the impact, as brands like BYD Co., Geely Automotive Holdings, and Guangzhou Automobile Group do not report their data to Mexico’s national statistics bureau Inegi. Mexico emerged as the world’s largest destination for Chinese cars in the first four months of the year, overtaking Russia, according to the China Passenger Car Association.

This influx has helped lower average new car prices in Mexico to about $32,000, compared to nearly $49,000 in the US. “The Chinese automotive industry has a production capacity on a scale superior to that of competitors in other regions, and this gives them a competitive advantage,” said Guillermo Rosales, president of auto association AMDA. Mexico’s welcoming policy toward these imports has contributed to the price drop, he added.

For General Motors, about 65% of sales in Mexico come from China, totaling 60,942 vehicles in the first half of the year. GM’s Aveo, produced in a joint venture with Chinese partners Shanghai Automotive Industry Corp. and Wuling Motors Holding, exemplifies this shift. Sales of GM’s China-made vehicles in Mexico have grown nearly 200 times between 2016 and 2024, fueled by a $5 billion investment in 2015 to develop compact models for export.

Consumer Appeal and Brand Loyalty

Buyers in Mexico prioritize affordability and reliability over origin. “When I saw it on the street, I immediately fell in love with it,” said Gatica, referring to her Aveo. “It doesn’t have a big trunk, but it’s very sporty, which I like.” Similarly, Mexico City shopkeeper Gabriela Juárez, who purchased an Aveo last year, emphasized brand trust. “We prefer Chevrolet because it’s a well regarded brand,” she said.

Dealers report strong demand for these models. “The Aveo is a very sporty and popular car, people tend to be surprised by how affordable it is,” said Guillermina González, a sales representative at a Mexico City showroom. “So as long as the car is made by GM, there is no concern about where it comes from.”

This acceptance extends to electric vehicles, where Chinese brands like BYD offer competitive pricing and financing options. Despite tariffs of up to 20% on Chinese imports in Mexico, these factors help mitigate costs for consumers.

Regulatory and Trade Challenges

US policies have intensified scrutiny on Chinese vehicles. Washington maintains tariffs to protect American automakers, with some dating back to President Donald Trump’s first term. Former President Joe Biden imposed a 100% duty on Chinese EVs and banned most cars with software developed in China. In his second term, Trump has threatened tariffs as high as 145% on Chinese imports.

These measures contrast with Mexico’s approach, but pressure is mounting. US policymakers and parts of Mexico’s auto industry advocate for higher barriers, possibly through a review of the USMCA trade pact. Amid this, retailer Liverpool Mexico SA de CV ended its distribution agreement with BYD in June, after the brand accounted for under 10% of its volume last year. Liverpool representative Nidia Ivana Garrido Mota stated the company plans to “continue focusing on our main business areas” and will not replace BYD with another brand.

Building on that, some experts remain optimistic. “The Chinese vehicles that have arrived are here to stay,” said César Fragozo, executive vice-president of the China Chamber in Mexico. He noted that competitive offers from companies like BYD blunt the impact of tariffs.

This raises questions about future access for EV enthusiasts. In the US, GM’s lowest-cost offering, the Chevy Trax, starts at around $22,000—higher than the Aveo in Mexico—and lacks the subcompact options phased out due to low demand and rising prices. Average US new car transaction prices have climbed nearly 23% since the pandemic, per Kelley Blue Book data.

GM navigates these dynamics by tailoring offerings to markets. “Our comprehensive portfolio in Mexico provides choices across different segments and price points to respond to different customer needs and lifestyles,” the company said in a statement. It sources vehicles from multiple locations, including the US and China, based on customer preferences.

For EV owners and enthusiasts, this trend underscores how Chinese production enables affordability in regions like Mexico, even as trade tensions limit options in the US. As exports from China continue to grow, the implications for global EV adoption could evolve, depending on regulatory shifts.

Photos courtesy of Wikipedia.