Mexico signs deal to build cars for Chinese firm JAC, creating 5,500 jobs, as US relationship sours

Mexico has announced a 4.4 billion peso (US$212 million) deal to assemble Chinese cars in the central state of Hidalgo, amid calls for the country to diversify economic ties as tensions have risen with the US, its largest trade partner.

Hidalgo Governor Omar Fayad announced the deal between Mexico’s Giant Motors Latinoamerica and Chinese state-owned automaker JAC Motors at a news conference in the capital.

The plant in Ciudad Sahagun, about 65km northeast of metropolitan Mexico City, will produce two SUV models and the first cars are expected to roll off assembly lines in the second half of this year.

Fayad said the plant will begin with a capacity of 11,000 vehicles annually, with output ultimately rising to 40,000. The initial phase of the project is expected to create 1,000 direct and 4,500 indirect jobs.

The vehicles are initially aimed at the Mexican market, but there are hopes of distributing elsewhere in Latin America in the future.

“This automobile will proudly carry a label that will say ‘Made in Mexico,’” Fayad said, “and that should be a cause for great pride for the people of Hidalgo.”