Chery is weighing local vehicle production in Canada alongside its plan to start selling cars there next year, with an executive saying the market is large enough to support a factory even without access to the United States. The Chinese automaker is one of several manufacturers moving into Canada under a trade deal that allows 49,000 Chinese-made electric and hybrid vehicles into the country each year at a reduced tariff rate.
Guibing Zhang, Chery's executive vice president, said in an interview with Bloomberg that Canada is worth having a factory for manufacturing even without the American market, and that the company is looking for the right opportunity and discussing possible formats.
No site or product line announced yet
Chery has not announced where in Canada a factory would be located or which models it would build. The company's preferred route is to find an existing local plant with spare capacity rather than start from scratch, and Zhang said Chery has begun speaking with investors across Canada who are enthusiastic about Chinese car manufacturers. Building a new plant remains an alternative, but it would be expensive and hard to justify unless the import quota is raised substantially or removed altogether.
That caution is easy to understand. Chery is currently competing for a share of just 49,000 imported vehicles a year, so there is no need to spend billions of dollars on a new factory at this stage. Using an underused plant would let the company establish a Canadian manufacturing footprint at far lower cost and risk, while keeping its options open if the quota grows.
Canada's quota draws several Chinese brands
The trade agreement between Canada and China permits 49,000 Chinese-built EVs and hybrids to be imported at a reduced tariff rate, and BYD, Geely and Chery are among the companies taking advantage. Chery intends to launch its vehicles in Canada next year.
Chery has already shown it is willing to share space with established automakers elsewhere. It signed a memorandum of understanding with Nissan in the UK that could see vehicles built at Nissan's Sunderland site, and it operates an ex-Nissan factory in South Africa where it will start building its own vehicles.
Ottawa draws a line at knockdown kits
Canada has welcomed Chinese vehicles but does not want companies simply assembling so-called knockdown kits, which are built elsewhere, partially disassembled and shipped over for local workers to reassemble. A report earlier this year said Stellantis was considering that approach with EVs from Leapmotor, drawing sharp criticism from federal Industry Minister Melanie Joly and Ontario Premier Doug Ford.
Flavio Volpe, president of the Automotive Parts Manufacturers' Association, told CTV News that such vehicles are completely manufactured in China with Chinese components, then partially disassembled and reassembled by several hundred workers like flat-pack furniture, which he contrasted with making cars in Canada, buying C$3 billion worth of parts a year and employing 10,000 to 12,000 people.
