MEXICO CITY — Before Mexico's Salinas Group struck a deal to assemble cars with a Chinese automaker, it talked with two Indian automakers, Mahindra & Mahindra Ltd. and Tata Motors Ltd., about a similar joint venture.
"This project has been ongoing for two years," says Javier Sarro, 46, CEO of Salinas' automotive division. "A year ago we started importing vehicles from China to test them with focus groups."
Salinas chose China FAW Group Corp., a major state-owned automaker in China. FAW has joint ventures to assemble vehicles in China with Volkswagen AG and Toyota Motor Corp.
Sarro says the plant will assemble, starting in late 2010, four-door sedan and five-door hatchback versions of two FAW models, the Xiali and Vita.
The plant will be built in Zinapecuaro, between Guadalajara and Mexico City. The cornerstone was laid last week.
The cars will start at $6,400 and be aimed at the low end of the market. Sarro says the Salinas Group will offer credit to low-income buyers. Both models will be available in 1.0-liter and 1.4-liter engines.