Chery Says North America Is So Important It Could Build Cars In Canada

Several major Chinese car manufacturers are venturing into the Canadian market thanks to the latest trade deal between the two nations. Chery is one of them, and alongside a plan to launch its vehicles in Canada next year, the company has expressed interest in building its cars locally. Canada's deal with China allows 49,000 Chinese-made EVs and hybrids to be imported into the country at a reduced tariff rate, and companies including BYD, Geely, and Chery, are jumping at the chance. 

While Chery appears even more eager to expand into the United States than into Canada, it believes having a factory in Canada is a good idea. "Even without the American market, Canada is a market that is worth having a factory for manufacturing," Chery's executive vice president Guibing Zhang said in an interview with Bloomberg. "We are looking for the suitable opportunity and communicating on the possible formats." The easiest way to make this happen would be to find a local manufacturing plant that has free capacity. 

Zhang indicated that Chery is already doing this and has started speaking to investors across Canada who are excited about Chinese car manufacturers. An alternative would be to construct a local plant. However, this would be expensive and wouldn't make sense unless the import quota was raised significantly or the cap was scrapped entirely. Chery currently only fights over a share of 49,000 vehicles so there's no need for it to invest billions of dollars into a new factory, at least for now.

In other markets, Chery has already shown a willingness to work alongside legacy brands. The Chinese automaker has signed a Memorandum of Understanding with Nissan in the UK to possibly build vehicles at its Sunderland site. Additionally, Chery runs an ex-Nissan factory in South Africa and will start building its own vehicles there. Although the Canadian government has opened its arms to Chinese vehicles, it doesn't want companies simply building so-called 'knockdown kits' in the country that are built elsewhere, partially disassembled, and then shipped over for reassembly by local workers. 

Earlier this year, a report indicated Stellantis was considering doing this with EVs from Leapmotor. This prompted fiery responses from Canada's federal Industry Minister Melanie Joly and Ontario Premier Doug Ford. "These vehicles are completely manufactured in China with Chinese components, then partially disassembled and brought here to be reassembled by several hundred workers, like IKEA furniture kits," noted Automotive Parts Manufacturers' Association president Flavio Volpe during an interview with CTV News. "That's completely different from making cars here and buying $3-billion worth of parts a year in Canada and employing 10,000 to 12,000 employees."