China Conquers Mexico’s Automotive Market, and the US Is Worried
www.wired.com
Led by the automaker BYD, China has established itself as the main car supplier in Mexico. The US worries China could use Mexico as a “back door” to sidestep tariffs and gain footing in the US market.

China has positioned itself as the main car supplier in Mexico, with exports reaching $4.6 billion in 2023, according to data from Mexico’s Secretariat of Economy.

The Chinese automaker BYD surpassed Honda and Nissan to position itself as the seventh largest automaker in the world by number of units sold during the April to June quarter. This growth was driven by increased demand for its affordable electric vehicles, according to data from automakers and research firm MarkLines.

The company’s new vehicle sales rose 40 percent year over year to 980,000 units in the quarter—the same quarter wherein most major automakers, including Toyota and Volkswagen, experienced a decline in sales. Much of BYD’s growth is attributed to its overseas sales, which nearly tripled in the past year to 105,000 units. Now BYD is considering locating its new auto plant in three Mexican states: Durango, Jalisco, and Nuevo Leon.

Foreign investment would be an economic boost for Mexico. The company has claimed that a plant there would create about 10,000 jobs. A Tesla competitor, BYD markets its Dolphin Mini model in Mexico for about 398,800 pesos—about $21,300 dollars—a little more than half the price of the cheapest Tesla model.

…

That tariff-free access is part of the US-Mexico-Canada Agreement (T-MEC), an updated version of the North American Free Trade Agreement that, as of 2018, eliminated tariffs on many products traded between the North American countries. Under the treaty, if a foreign automotive company that manufactures vehicles in Canada or Mexico can demonstrate that the materials used are locally sourced, its products can be exported to the United States virtually duty-free.

MAGA strikes again

  • john@lemmy.haley.ioEnglish
    3710·
    3 个月前

    The main problem with BYD cars is that they are heavily subsidizing by the Chinese government.

    If you remove those subsidies then those cars aren’t going to be very competitive. But the problem would be that by the time the Chinese government stopped subsidies, there wouldn’t be any competition left.

    Our best ways to counteract this would either be through heavy tariffs or by subsidizing our own companies in the west.

    MAGA wants to do the tariffs route which is basically a bandaid solution that would prevent the Chinese companies from owning the US market but it wouldn’t do anything outside of that. Plus it doesn’t solve is being competitive, it’s just covering its ears and “lalala”’ing the issue for later generations to deal with it. Which honestly, that tracks for basically their whole platform.

    If you do the subsidies route though, we’d have to make sure we’re not just constantly lining Musk’s pockets but Tesla is the company has the biggest head start. And Musk is a PoS but the devil’s credit is that our EV market wouldn’t exist without Tesla.

    IMO, we need to diversify our EV makers and help provide the capital to bootstrap it. And while that’s happening we need to not let cheap Chinese cars flood the market to undercut any chance we have. So basically we need a combination of both solutions.

    • mlg@lemmy.worldEnglish
      22·
      3 个月前

      Yeah anytime the US “subsidizes” something in the local auto market, GM alone eats it up in 5 seconds and pretends they did something with it. Sometimes Ford and Chrysler also get a share.

      I’m pretty sure they already recently gave funding to GM for EVs which will go absolutely nowhere because all their major sales are from regular gasoline cars.

      I was even hopeful of Ford’s hybrid Fusion, but they killed that one too because money.

      If they really want to make some serious competition, they should break up the oligopoly of car OEMs. But they never did and never will.

      This exact scenario already played out with Japanese OEMs decades ago. They brought a superior product to the market, and instead of competing, they just lobbied congress to make a crap ton of stupid import laws to prevent Japanese cars from taking the market.

      Then they had a weird era of those hybrid car brands where the big 3 made partnerships with Nissan, Toyota, etc for tech sharing because they couldn’t even properly R&D for crap.

      Then Nissan, Toyota, Honda, and Subaru opened plants inside the USA to bypass the import stuff, and here we are today.

      The only difference this time is instead of what was generally perceived as an economic ally, the new kid on the block is the next enemy after Russia. And tbh not even a major threat type of enemy.

      • ✺roguetrick✺@lemmy.worldEnglish
        31·
        3 个月前

        not even a major threat type of enemy

        Brother the American industry apocalypse after China invades Taiwan and TSMC is torched will make the economic impacts of the rona look like a tea party.

        • mlg@lemmy.worldEnglish
          2·
          3 个月前

          Washington can’t fathom not running their monopoly on every global market lol.

          China is supposed to be a dirty 3rd world outsource nation, not a competitor. They should do as told instead of actually investing in their country’s infrastructure /s.

          • UnderpantsWeevil@lemmy.worldOPEnglish
            2·
            3 个月前

            They should do as told instead of actually investing in their country’s infrastructure /s.

            Oh fuck, its the trains, isn’t it? We are their enemy because they built trains. Its the same reason we tanked Japan’s economy in the 90s.

    • Deceptichum@quokk.auEnglish
      161·
      3 个月前

      It’s not even the heavy subsidising, China makes the US look like it has strong employee rights and environmental regulations.

        • Rekorse@sh.itjust.worksEnglish
          33·
          3 个月前

          Unless china has some secret set of labor laws they follow, their labor laws are far more fair to the average worker.

          The median wage for a Chinese worker is higher than the median for a us worker but the mean is the opposite, which implies the US has a huge wealth imbalance in comparison.

          Edit to add a quote from the Wikipedia page on chinas environmental policy:

          "Since the 2010s, the government has given greater attention to environmental protection through policy actions such as the signing of the Paris climate accord, the 13th Five-Year Plan and the 2015 Environmental Protection Law reform [7] From 2006 to 2017, sulphur dioxide levels in China were reduced by 70 percent,[8] and air pollution has decreased from 2013 to 2018[8] In 2017, investments in renewable energy amounted to US$279.8 billion worldwide, with China accounting for US$126.6 billion or 45% of the global investments.[9] China has since become the world’s largest investor, producer and consumer of renewable energy worldwide, manufacturing state-of-the-art solar panels, wind turbines and hydroelectric energy facilities as well as becoming the world’s largest producer of electric cars and buses.[10] Its commitment to reducing its greenhouse gas emissions has been a major force in decreasing the global cost of wind and solar power, in turn helping the use of renewable energy to rise globally.[11]: 8 "

    • nucleative@lemmy.worldEnglish
      135·
      3 个月前

      One could argue that China’s governmental subsidizing of the industry just shows the commitment they have to be a leader and dominant player in the future of transportation worldwide.

      Does the American government have such aspirations? Does the American Auto industry have the vision and goal to adapt to a disrupted market?

      In my opinion the arguments surrounding this topic come down to which country is going to work harder to play a leading role in the future.

      China is making their bet, and the quality of Chinese EVs is increasing extremely rapidly. If they can so easily dominate the American Auto Market that tells us that the Americans have been sleeping at the wheel and need to make some tough choices about spending. We can curtail the onslaught through duties and various taxes and regulations but not indefinitely.

    • Rekorse@sh.itjust.worksEnglish
      102·
      3 个月前

      I would say that all tracks but american car companies are refusing to even attempt to make an affordable electric vehicle, so how can you say its just a gap in research that subsidies would fix.

      Subsidies would be drained the same way the profits were, why wouldnt they. American car companies refuse to listen to demand, and this is what they get for it.

      • weew@lemmy.caEnglish
        41·
        3 个月前

        If China wants to pay for my next car for me, I’m fine with that.

      • jimbolauski@lemm.eeEnglish
        22·
        3 个月前

        They could build and sell a basic car (combustion) for under $15k if enough people bought them but most people don’t want stripped down compact cars. There’s just not enough of a market to justify cheap cars in the US.

        • Rekorse@sh.itjust.worksEnglish
          2·
          3 个月前

          I disagree but I don’t really have any data or anything.

          In my opinion most people want the least car they need. Its a tool and the simpler and more efficient the better. We won’t know because there just isnt a line of cars like that.

          I have a 2017 Mitsubishi mirage manual thats very simple and efficient, not a bad example.

          • jimbolauski@lemm.eeEnglish
            3·
            3 个月前

            Mitsubishi sold 87,000 vehicles in 2023 only 13,000 were mirages. Kia sold 782,000, 27,000 were rios. Nissian sold 235,000, 4,000 were versas.

            In Europe the dacia sold 493,000, 200,000 were sanderos. Those are the numbers needed to make cheap compact cars.

            • Rekorse@sh.itjust.worksEnglish
              1·
              3 个月前

              Its an example of the type of car I think would sell well if an american car company made it.

              There is no comparison vehicle by american brands at the moment.

              • jimbolauski@lemm.eeEnglish
                1·
                3 个月前

                Renault could import the Dacia Sandero and have its msrp be $1000 less than the versa after terrifs. With that kind of price advantage you’d think they would but there’s been no effort on their part. The US market for cheap vehicles is too small.

                • Rekorse@sh.itjust.worksEnglish
                  1·
                  3 个月前

                  I don’t have an issue myself but I think. the average american wants to buy from one of the american brands, even the one thats not american anymore.

                  I don’t think Americans trust dirt cheap foreign goods just yet. Harder to find the right person to yell at you know, or whatever.

                  • jimbolauski@lemm.eeEnglish
                    1·
                    3 个月前

                    The Mazda 3s in the 2010s were cheap and were competitive with the focus sales wise. Kia has sold tons of vehicles and they are piles of cheap garbage yet Americans keep buying their larger vehicles.

        • TonyOstrich@lemmy.worldEnglish
          2·
          3 个月前

          I think you are right, and I hate that it is a fact.

          What I want right now is a small electric kei truck or utility van for use as an in city daily driver. Just make the cargo area large enough to put 4’x8’ sheets of plywood in it and close without any fuss and I am sold, but I don’t think that’s going to happen here anytime soon.

          Ford discontinued selling their small Transit Connect van here recently so that isn’t even an option anymore.

          • Rekorse@sh.itjust.worksEnglish
            11·
            3 个月前

            Thr problem is there is not a good deal in america period. Even the cheaper cars have horrible privacy and data collection issues. The fact is that every car company in America is predatory and greedy. Not a single one of them is trying to make a good car. The american way is some engineers come up with a great efficient car, and then money people manipulate it into a monster that just has the illusion of being a good car.

            Ask an engineer who’s worked with the big three what they think of them and they will talk for hours about essentially how immoral they are.

            Also maybe ask yourselves why foreign car companies make cars here, and its not just tariffs. A lot of countries, including Asian ones, have better protections for their citizens and its actually cheaper to hire dumb Americans from flyover state.

            Some companies specifically target low income areas for the cheap replaceable labour.

          • jimbolauski@lemm.eeEnglish
            1·
            3 个月前

            The Corolla is not a compact car, is has the same footprint as most small suvs. The yaris was Toyota’s compact.

              • jimbolauski@lemm.eeEnglish
                1·
                3 个月前

                New civics are as wide as a Corolla but have a slightly longer wheelbase. They’re small compared to midsize and full size SUVs but are not compact vehicles.

                • UnderpantsWeevil@lemmy.worldOPEnglish
                  1·
                  3 个月前

                  American vehicle safety standards, combined with the rising number of SUVs on the road, have driven domestic automakers to increase the size of their vehicles overall.

                  But the Civic is classically considered a compact car. If you drive into a grocery store parking lot labeled “Compact Cars Only”, nobody is going to tow you.

                  • jimbolauski@lemm.eeEnglish
                    1·
                    3 个月前

                    Honda increased the size of the civic to meet us consumer wants, and put the fit in it’s place. The crash ratings are the same between the two. Americans don’t want cheap small cars it’s why the civic outsells the fit 10:1.

    • curiousaur@reddthat.comEnglish
      93·
      3 个月前

      So you’re saying that buying one means that the American working class is extracting value from the Chinese government? Sounds great to me.

    • Teepo@sh.itjust.worksEnglish
      4·
      3 个月前

      The vast majority of those subsidies (rebates, sales tax exemption, government procurement of EVs) you linked don’t seem like they would apply to exported vehicles. This suggests exports would indeed be very price competitive, wouldn’t it?

    • Buffalox@lemmy.worldEnglish
      63·
      3 个月前

      by the time the Chinese government stopped subsidies, there wouldn’t be any competition left.

      What? BMW EV surpassed Tesla sales in Europe for July. BMW, VW, AUDI, Skoda all have very attractive alternatives to Tesla, and Mercedes too, if you want higher quality and don’t mind it’s a bit more expensive.
      So how do you figure there is no competition without China?
      From Korea we Have Hyundai and KIA, and from USA there is Rivian and Ford.
      Arguably the American competition is the weakest, but still it seems to me there is lots of competition, even without including Chinese cars.

    • superkret@feddit.orgEnglish
      43·
      3 个月前

      The main problem with BYD cars is that they are heavily subsidizing by the Chinese government.

      Great, then every BYD car sold in the US helps bankrupt the Chinese state.

    • Hildegarde@lemmy.worldEnglish
      613·
      3 个月前

      IMO, we need to diversify our EV makers and help provide the capital to bootstrap it.

      Good business when the us does it, evil market destroying subsidies when china.

      • john@lemmy.haley.ioEnglish
        9·
        3 个月前

        Literally didn’t say any of that. I was stating how the US could be competitive.