Nissan is preparing for the possibility that Chinese automakers will begin building vehicles in Mexico within the next two to three years, a move that could intensify competition for Nissan and other established automakers serving the U.S. market.
Nissan Americas Chairman Christian Meunier told Automotive News that Chinese automakers could start producing cars in Mexico “in the next two to three years.” Nissan has already begun preparing countermeasures, with cost-cutting at the center of its response.
Automakers Raise Concerns Over Chinese Competition
Nissan is the latest automaker to raise concerns about the growing global presence of Chinese vehicle manufacturers. Ford has warned that Chinese automakers could enter the U.S. market within the next five to 10 years, potentially disrupting competition, particularly in the affordable vehicle segment.
Hyundai has also pointed to the rapid expansion of Chinese brands in Europe and warned that the U.S. could experience a similar shift without safeguards.
Nissan is placing particular emphasis on Mexico because Chinese automakers producing vehicles there could have more direct implications for the U.S. market than simply exporting vehicles to Mexico.
Chinese Automakers Could Localize Production in Mexico
The U.S. imposes tariffs of around 100% on Chinese EVs, while Mexico applies a 50% tariff to Chinese auto imports. Building vehicles locally in Mexico could largely eliminate that import-tariff disadvantage and make it more difficult for Nissan and other legacy automakers to compete with lower-cost development, supply chains and pricing.
Nissan already produces U.S.-bound vehicles in Mexico, including the Sentra and Kicks. The Japanese automaker has said it still needs to manufacture those entry-level models there because they cannot be produced in the U.S. at the same cost, even with tariff exposure.
Chinese automakers establishing production in Mexico could therefore place additional pressure on Nissan’s prices and margins.
Nissan Targets Major Cost Reductions
Nissan is already restructuring its costs and product development as part of its Re:Nissan recovery plan. The plan targets ¥500 billion, or roughly $3.1 billion, in savings.
As part of the effort, Nissan plans to cut about 20,000 jobs and reduce its global vehicle-production plants from 17 to 10 by fiscal 2027.
Chinese Brands Gain Ground in Mexico
Mexico is Nissan’s fourth-largest global operation, while Chinese brands accounted for 17% of new-vehicle sales in the country during the first half of 2026. That was up from 14% a year earlier.
The growth could leave Nissan particularly exposed if Chinese automakers establish local production in Mexico. The report identified Chery, BYD, Leapmotor and Geely among the brands targeting significant sales growth in the country.
U.S. Lawmakers Debate Restrictions on Chinese Vehicles
In the U.S., President Donald Trump has said he would be open to Chinese automakers building vehicles domestically as long as they employ American workers.
Meanwhile, Sens. Bernie Moreno and Elissa Slotkin are pushing legislation that would fast-track measures to codify and expand restrictions on Chinese vehicles. The effort was delayed last week because the procedure requires unanimous consent, while Sen. Rand Paul was expected to object.
The sponsors said they would try again this week as concerns continue over the potential expansion of Chinese automakers into North American vehicle production.
