Mexico may bar dealer from Chinese car imports

A top official at Mexico's Economy Ministry told media recently that the nation may bar domestic auto dealer Grupo Salinas Motors (GSM) from importing cars made by China's First Auto Works (FAW).

"We are in the middle of a judicial review of the authorization that was given a few years ago to see what legal measures we might take," Adalberto Gonzalez, who heads the ministry's heavy industry department told media after giving a speech at the International Auto Industry Congress, held in Mexico City.

Grupo Salinas and FAW recently cancelled plans to build an auto manufacturing plant in Pacific coast state Michoacan, where drug violence has killed at least 20 people in the last seven days. Mexico's auto market has also been in a funk since mid-October when a credit crunch spreading from the United States cut off financing to consumers and business people.

According to the ministry, Salinas had been importing FAW cars free of duties under a rule that allows firms to build a market for their cars providing they plan to invest at least 100 million dollars in a plant in Mexico that will produce 50,000 cars a year.

GSM's license to import expires on Nov. 23 so if the ministry must act before then, he said.

GSM is owned by one of Mexico's richest men, Ricardo Salinas Pliego. It will be obliged to keep providing parts and service for FAW cars even if it is barred from importing them.