A joint venture between businesses from Mexico and China will invest MXN 6 billion ($350 million) to build a vehicle assembly plant in the central state of Hidalgo to produce vehicles for the Asian brand Hongqi and Bestune, the Ministry of Development Economic (Sedeco) of the state told SteelOrbis.
"On Monday the letters of intent were signed" between the state of Hidalgo and the new company that until now is called "SAAG" or "Sangai Autos". The name of the investing companies is confidential at the moment, said the spokeswoman for Sedeco of Hidalgo, Patricia Sanchez, in an exclusive interview.
By the name of the models to be assembled in Mexico, it could be the Chinese state company FAW Group Corp. (First Automobile Works) which is a shareholder of Bestune and Hongqi (luxury cars), one of the investors. On the side of the Mexican partner, at the moment it is unknown.
In Mexico, one of the partners of the FAW Group is the billionaire Carlos Slim Helu through his company Giant Motors Latin America, which produces trucks of the Chinese brand FAW. In partnership with JAC Motors Company, he also assembles light vehicles in Ciudad Sahagún, Hidalgo.
The new production plant will be located in the city of Zapotlan de Juarez, 35 miles northwest of Ciudad Sahagun and 46 miles north of Mexico City (the largest consumer market in the country).
According to the spokeswoman, "the beginning of the construction of the plant will depend on the investors." Although the idea is to generate 480 direct jobs and generate around 4,800 indirect jobs.
The first attempt to produce FAW-brand vehicles was in 2007, with billionaire Ricardo Salinas Pliego, owner of the Elektra retail store chain, Azteca bank and the TV Azteca television station; however, the project failed.
The most recent data from the International Organization of Motor Vehicle Manufacturers (OICA) ranks Mexico as the seventh largest vehicle producer, very close to Germany.