Chery Automobile Co. is eyeing local manufacturing in Canada after sales in that market begins in 2027, it will put one of the biggest carmakers from China on the northern doorstep of the U.S. While entry into the U.S. remains highly uncertain, Chery views Canada as a significant enough market to develop a more substantial presence. We are looking at options such as absorbing idling capacity at existing plants and cooperating with partners, Guibing Zhang, the Executive Vice President, said in an interview at Chery’s headquarters in Wuhu, China.
He added, “Even without the American market, Canada is a market that is worth having a factory for manufacturing. We are looking for the suitable opportunity and communicating on the possible formats.”
If the deal is approved, Chery would as well be the first Chinese car manufacturer to establish a manufacturing presence in Canada, which is indeed a major coup for Prime Minister Mark Carney’s drive to attract investment when it comes to the domestic auto industry. But it could also further strain ties with the U.S., with industry watchers seeing Canada as a springboard for inevitable Chinese electric vehicle entry into the American market.
Currently, steep tariffs and technology restrictions are keeping Chinese electric vehicles off American roads, and officials have been clear that Chinese cars from Canada will not be allowed to enter the U.S. President Donald Trump has made a distinction between imports and production, suggesting in September that he might be open to allowing a Chinese automaker to build in the U.S. and hire local workers.
U.S. Objectives
Chery executives have said they would like to enter the US at some stage. The market has been closed off in the near term, Zhang said, without naming any companies. The carmaker is also talking to investors across Canada interested in buying Chinese automakers while looking at idle capacity.
Since agreeing to allow the annual import of 49,000 Chinese new-energy vehicles at low tariffs, which is indeed a quota that will increase each year, Canada has been laying out the red carpet for Chinese automakers.
Melanie Joly, the Canadian Industry Minister, visited China in June 2026 to meet with executives from Geely Automobile Holdings Ltd. and BYD Co., as well as Chery, saying at that point the companies were open to looking at joint ventures.
Joly has already set guidelines for Chinese auto manufacturing, which include a local supply chain and compliance with Canadian labour standards. She has said that the software of the cars must be sufficiently safe to ease any national security concerns.
The minister has also ruled out what are known as knockdown kits, where cars are expected to be largely assembled in China and transported to Canada for final assembly.
Vice President of Chery, Charlie Zhang, has been in constant touch with Joly, Zhang said.
It is well to be noted that the automakers from China are indeed making a high-stakes push when it comes to the overseas markets so as to offset a downturn in sales at home, and Chery is getting ready to begin selling in Canada in 2027. Consumers are moving to cheaper, technology-focused models from the Chinese, and the flood has triggered protectionist policies to preserve domestic brands.
And that’s forcing the Chinese towards local manufacturing in Canada in turn. Chery has a JV plant in Spain that will help it avoid European Union tariffs and quotas. It acquired a Nissan Motor Co. factory located in South Africa in order to build a manufacturing hub for the continent and is looking into manufacturing vehicles at Nissan’s Sunderland plant located in the U.K. BYD, a rival, is also set to begin selling its cars in Canada. The world’s biggest maker of EVs said earlier it was thinking about setting up a plant there and asked about buying over an idle Stellantis NV plant in the Toronto suburbs so as to build buses, a local politician had said in September 2026. It is well to be noted that BYD used to have a bus assembly facility in Ontario, which ceased operations in 2023.
Geely, meanwhile, is scheduled to start selling its cars in Canada in 2027 but has not explicitly said if it would like to manufacture there.
Zhang added, “If we can find some good ways to merge with partners, not only just from investments from Chery but from different parties, and if we can get the manufacturing going — I think that is something that the Canadian government would welcome.”