- China automakers will set up Mexico factories within three years, Nissan America’s Chairman predicts.
- Christian Meunier says Nissan is cutting costs, plans to send China-built cars to Mexico to meet the push.
- China brands will sell in US eventually, but not for at least five years, Meunier suggested to Auto News.
America rolled out the red carpet for China president Xi Jinping last week, though Chinese cars on US roads remains a firm red line. But a senior Nissan executive is warning that Chinese automakers will start building cars on the continent in as little as two years despite US senators’ determination to keep them at bay.
Nissan America’s Chairman Christian Meunier predicts that Chinese automakers will be building cars in Mexico, just hours from the US border, within three years.
Related: US Lawmakers Push For A Permanent Ban On Chinese Cars
“We have a very aggressive plan in Mexico, especially to get the cost down for us to be able to compete with the Chinese when they get localized,” Meunier told guests at Nissan’s HQ in Yokohama, Japan. “It will happen probably in the next two to three years, so we need to be ready,” Auto News reports him saying.
Like Bill Ford and Ford’s CEO, Jim Farley, Meunier is convinced that Chinese brands will eventually find their way onto US streets. He thinks that won’t happen for at least five years though, which gives existing US brands a little time to prepare for a battle on home turf.
Build Local To Escape Tariffs
But most of those brands also operate south of the border, where Chinese cars are already sold, albeit hampered by a 50 percent tariff. The Mexican market is going to be even tougher once cars are built locally, and prices are pushed even lower without tariffs in place. Legacy brands are going to have to push theirs down to compete.
“Cost competitiveness is going to be the rule of the game in the next five years,” Meunier said, claiming that Western and Japanese brands haven’t worked hard enough in recent years to reduce costs. He described Nissan’s current supply and cost setup as being “not good enough to compete head to head with the BYDs of this world.”
Fight Fire With Fire
But Meunier says Nissan has another weapon in its arsenal besides simply trimming fat, one that will help it keep pace with the Chinese. It plans to give China’s automakers a taste of their own medicine by selling China-built models in Mexico. The Frontier Pro pickup (above) is now being launched in the country, and availability will expand to Latin America this year, Auto News reports. The N7 electric sedan (bottom pic) will also soon land in the region from China to tap into a boom in EV sales.
“We’re taking advantage of the opportunity to have a Chinese developed product compete with Chinese manufacturers in Latin America, because it’s clearly a big, fast invasion that is happening,” Meunier said.
Europe Shows What Could Happen
Meunier’s warning comes less than two weeks after Hyundai CEO Jose Munoz raised the alarm over the prospect of Chinese cars disrupting the US market. Munoz said that without safeguards in place, the US could end up like the UK or Europe, where one in every 10 cars sold is Chinese, a share that is only growing.
Big tariffs on Chinese cars currently keep them out of the US, but senators are currently trying to introduce legislation to permanently ban them. At the same time, President Trump has said he is open to the idea of Chinese brands opening car plants inside US borders.
