Chinese Automakers Compete for Mexico Plant, Jobs at Stake

A closed Nissan factory in Aguascalientes, Mexico is getting a second chance at life, and it could bring thousands of jobs with it.

Chinese automakers BYD and Geely have made the shortlist to purchase the shuttered manufacturing plant, competing against Vietnamese electric vehicle maker VinFast. The three finalists emerged from a field of nine companies vying for the facility, which comes ready to produce 230,000 vehicles annually with existing infrastructure and trained workers already in place.

The timing couldn't be more critical for the region. Mexico's auto industry lost about 60,000 jobs last year as U.S. tariffs hammered production, and vehicle exports to America fell nearly 3% in 2025. Aguascalientes, a manufacturing hub in north-central Mexico, has felt the pain acutely since the plant closed.

The factory originally opened in 2017 as a $1 billion joint venture between Daimler and the Renault-Nissan Alliance. Now it represents something bigger: a potential lifeline for workers and families who depend on automotive jobs, and a testing ground for how North American trade relationships will evolve.

Chinese automakers have surged in Mexico, growing from zero market share in 2020 to about 10% last year. They see Mexico as essential for selling cars throughout Latin America, especially after Mexico imposed 50% tariffs on Chinese imports last year, which actually encouraged Chinese companies to build factories there instead of just importing finished vehicles.

The Ripple Effect

The sale carries weight far beyond one factory floor. Whichever company wins will create jobs not just inside the plant, but across the supply chain in transportation, parts manufacturing, and services. The region's skilled workforce won't have to relocate or retrain because the factory infrastructure already exists.

However, Mexican officials face a delicate balancing act. The country needs the jobs desperately, but a major Chinese manufacturing presence could complicate upcoming North American trade agreement negotiations with the United States. Economy Ministry officials are reportedly asking Aguascalientes leaders to delay their decision until after trade talks conclude, which are scheduled to formally review in July but have already begun preliminary discussions.

For BYD specifically, this represents years of effort coming to fruition. The company tried to build a massive new factory in Mexico that could produce 500,000 vehicles annually, but China's own Ministry of Commerce blocked the deal over concerns about technology leaking to U.S. competitors.

The shuttered plant offers these automakers something rare: a fully operational facility with trained workers, established supply chains, and the capacity to start production quickly. In an industry where building new plants takes years and billions of dollars, that's an opportunity worth competing for.