Trade Tensions, Tariffs Weigh on Mexico’s Auto Sector: Auto Week

This week in auto news: Trade tensions and policy shifts are pressuring Mexico’s automotive sector, with the United States proposing to end EV incentives and raising tariffs on key materials. GM and Michelin announced plans to scale back local production, heightening competitiveness concerns. Meanwhile, Mexican auto sales reached an eight-year high, and Chinese automakers BYD and Soueast expanded operations, signaling strong market interest.

Rev up your engines—this is the week in auto!

Mexico Auto Industry at a Crossroads Amid Trade, China Challenges

US political pressure to build more in the United States has also pushed automakers to relocate jobs back to that country, often at the expense of Mexican plants. Some US subsidies or tax incentives favor domestic production, discouraging investment in Mexico, meaning there is a clear risk of losing our edge as a low-cost production hub, says Fernando Enciso, General Director, Grupo Autofin Mexico.

US Bill to End EV Incentives Threatens US-Mexico Supply Chain

The potential repeal of electric vehicle (EV) incentives under a Republican-backed bill in the US Congress threatens to disrupt the rapidly developing North American EV supply chain, which has become increasingly integrated between the United States and Mexico. Industry experts and stakeholders caution that if the Senate passes the so-called “Big Beautiful Bill,” production and job growth across the region could face significant setbacks starting in 2026.

Volvo’s 2026 EX60 SUV to Feature Real-Time Adaptive Seatbelt

Volvo Cars announced plans to introduce a new multi-adaptive seatbelt in its upcoming electric mid-size SUV, the Volvo EX60, set for release in 2026. This innovation represents a major advancement from the conventional three-point seatbelt, first pioneered by Volvo in 1959. According to the company, the new seatbelt dynamically adjusts tension and load in real-time based on crash specifics and individual occupant characteristics.

BYD Targets Premium EVs with Denza Dealership in Monterrey

BYD announced it will open the first dealership in Latin America for its premium brand Denza in Monterrey, Mexico, by September 2025. The move marks the start of Denza’s formal entry into Mexico as part of BYD’s strategy to expand in the premium electric vehicle (EV) segment across the region.

GM Plans Production Relocation from Mexico to US by 2027

General Motors (GM) announced a US$4 billion investment plan to expand production capacity across three US plants, signaling a partial shift in manufacturing of the Chevrolet Blazer and Equinox SUVs from Mexico to the United States beginning in 2027. 

Michelin to End Tire Production at Queretaro Plant by 2025

Michelin Mexico has announced plans to gradually scale down tire production at its Queretaro plant, aiming to fully cease industrial operations by the end of 2025. The decision follows an internal review and is attributed to evolving market trends for passenger car and light truck tires.

US Tariffs May Hinder North America’s Auto Output

North American automotive manufacturers could halt production of up to 1 million vehicles in 2025 as a result of increased US tariffs on steel and aluminum, according to Diego Giangreco, Senior Global Analyst, CRU. The new tariffs — raised from 25% to 50% — took effect June 4 and are set to significantly impact Mexico’s auto industry.

Soueast to Enter in Mexico With 45 Dealers Nationwide

Chinese automaker Soueast will begin operations in Mexico on June 18 through a commercial partnership with Jetour, says the company. Jetour, which entered the Mexican market in 2023, is undergoing a structural expansion and will operate 45 dealerships nationwide. Service and customer support operations will be shared between the two brands.

Nissan Ends U.S. Manual Versa S Sales Citing Tariffs

Nissan has officially discontinued the Versa S manual in the United States, marking the end of new manual transmission sedans priced under US$20,000 in the US market. The decision follows increased tariffs on Mexican-made vehicles and declining consumer interest in manual gearboxes.

Hyundai’s MyHyundai App Tops J.D. Power EV Report for 2025

Hyundai’s MyHyundai with Bluelink mobile application has been ranked the highest-rated mass-market electric vehicle (EV) app in the J.D. Power 2025 US OEM EV App Report. The app achieved a score of 820 out of 1,000, exceeding the mass-market segment average by 108 points and securing the top spot for the second consecutive year.

Mexican Auto Sales Reach Eight-Year High in 2025

Mexico’s automotive sector recorded its highest sales volume in eight years, reaching 593,284 new light vehicles sold between January and May 2025, according to data from the National Institute of Statistics and Geography (INEGI). This figure represents a 0.9% increase over the same period in 2024, despite broader signs of market deceleration and external uncertainties.