Mexico Tariffs to Gradually Lift Vehicle Prices, GWM CEO Says

Mexico’s decision to impose tariffs on imports from countries without a trade agreement will gradually increase vehicle prices across the automotive sector, according to Pedro Albarrán, CEO and vice president, Great Wall Motor (GWM) in Mexico. Albarrán told Milenio that the measure affects the entire supply chain, not only Chinese brands, while confirming that GWM plans to maintain and expand its long-term presence in the country.

The price impact comes amid Mexico’s reform of the General Import and Export Tax Law, which covers 17 sectors ranging from perfumes and cosmetics to plastics, textiles, footwear, vehicles, auto parts, toys, and home appliances. Under a decree published in the Official Gazette, Mexico raised import tariffs from 5% to as much as 50% on products from countries without a free trade agreement, including China, India, South Korea, Brazil, and Russia. The changes took effect Jan. 1, increasing import costs and pressuring company margins.

In December 2025, China urged Mexico to reverse what it described as unilateral and protectionist measures. A spokesperson for China’s Ministry of Commerce said the measures would “seriously harm the interests of trading partners such as China” and called on Mexico to work with Beijing to “jointly safeguard the overall situation of bilateral economic and trade relations.”

Tariffs, estimated by industry executives at an average of around 30%, apply broadly to automakers that rely on components or vehicles sourced from markets such as India, Thailand, Indonesia, China, and South Korea. “Many people think these tariffs are aimed only at Chinese brands, but that is not the case,” Albarrán said. “This measure applies to everyone. In reality, the entire industry is being affected, because many of the largest vehicle importers in Mexico are not Chinese brands, but North American ones.”

Albarrán said the impact will reach consumers through gradual price adjustments rather than sudden increases. “This will clearly have an impact on the consumer, because price adjustments will come progressively,” he said. “Not only that, the global supply of auto parts will also be affected. These increases will not be abrupt; all brands will try to manage them carefully, but there will be an impact for the customer.”

Automotive parts and tires imported from China are expected to raise final consumer prices by 15% to 20%, depending on the product, according to industry executives. Rubén González, owner of a tire distribution company in Nuevo Leon, said tire prices  have already risen between 10% and 15% for cars and light trucks and between 20% and 35% for heavy trucks.

Carlos Olmeda, deputy director, Jomar Autoparte, said autoparts could face average price increases of up to 155% for consumers once existing inventories are depleted, likely by March.

Data from Mexico’s national statistics agency INEGI show that automotive inflation in 2025 stood at 1.32%, well below the overall inflation rate of 3.69%. Albarrán said that gap could narrow in 2026 as the new tariffs filter through pricing structures across the industry.

For GWM, Albarrán said the response will focus on product selection and configuration to limit the impact on buyers. “We have to make adjustments, but we are being more selective with configurations so the effect is as small as possible,” he said. “Automakers do not plan in the short term. A brand like ours has a very long-term strategy in Mexico.”

He added that the tariff phase represents an adjustment period rather than a shift in strategy. “This adaptation to tariffs is just a phase we have to get through. It does not change our underlying strategy in any way,” Albarrán said. “We want to continue building a solid relationship with customers and show that we are a serious brand, committed to aftersales service, product quality, and competitive configurations.”

GWM sold 15,336 vehicles in Mexico in 2025, according to INEGI data, a 6.1% increase from the previous year. Albarrán said hybrid vehicles remain the company’s main growth driver in the Mexican market. “We believe what works best today in Mexico is the hybrid,” he said. “We are very strong there and will continue to add products. We do not rule out electric vehicles, but we do not yet see them as the main driver.” According to the Mexican Automotive Industry Association (AMIA), hybrid vehicle sales rose 17.4% from 2024, confirming a gradual shift in consumer preferences.

The company plans most of its new model launches for 2H26, including additions to its Haval line and a potential new ORA model. Albarrán also identified pickup trucks as a significant growth opportunity for the brand in Mexico.

Looking ahead to 2026, Albarrán said GWM expects double-digit sales growth but does not see volume as its primary metric. “What matters most to us is maintaining very high customer satisfaction,” he said. He added that GWM currently operates 50 dealerships and sales points in Mexico and does not plan to expand that network in the near term. “We want to consolidate and give time to the distributors who already made investments,” he said.

Mexico’s tariff move comes as Canada and China take steps in the opposite direction, reaching a preliminary trade agreement to ease tariffs on EVs and canola. Canadian Prime Minister Mark Carney said the talks aim to reduce trade frictions, following meetings in Beijing with senior Chinese officials, including President Xi Jinping.