China’s JAC Joins Mexican SUV Venture

China’s Jianghuai Automobile Co. is setting up a production beachhead in North America through a new joint venture with Mexican assembler Giant Motors Latinoamerica SA and vehicle distributor Chori Co.

JAC is spending about 1.5 billion yuan ($218 million) to prepare an existing Giant Motors factory in Ciudad Sahagun, Hidalgo to assemble as many as 10,000 of JAC’s S2 and S3 SUVs per year. Output will target the Mexican market.

The partners hope to eventually expand annual output to 40,000 units and offer the vehicles elsewhere in Latin America.

Hidalgo Gov. Omar Fayad says the factory will begin pilot production in March and launch high-volume output in the second half of 2017. He also says the facility may eventually make all-electric vehicles.

Giant Motors is partly owned by Mexican billionaire Carlos Slim’s Grupo Financiero Inbursa. The company, which is based in Mexico City, assembles an array of commercial vehicles through a technical alliance with China’s FAW Group.