China-based manufacturer of precision aluminium alloy components for cars Ningbo Xusheng Group is investing $276m to set up five new subsidiaries in Hong Kong, the US and Mexico.
The new subsidiaries will support the construction by Xusheng of a factory in Mexico intended to expand the company’s business activities in North America.
According to its corporate website, Xusheng has eight existing manufacturing plants and its headquarters in China. It employs more than 2,000 people worldwide.
Xusheng primarily exports its products to European and American car markers out of the Chinese port city of Ningbo, in Zhejiang province. This business model somewhat protected the business during Covid-19, as it still had orders to fulfil while China was locked down.
Following the Covid-19 outbreak, companies operating internationally have been increasingly nearshoring their production facilities closer to destination markets, to reduce expose to supply chain issues in the future. Xusheng’s Mexican factory and new subsidiaries are a part of this trend.
Mexico has been a particular beneficiary of this nearshoring trend in the automotive sector, with other Chinese companies such as Jiangsu Xinquan Automotive Trim and American companies such as Tesla building manufacturing facilities in the country.
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Xusheng manufactures and distributes machinery and mold parts for the auto industry. Its clients include international tier one automotive companies including Tesla, Mercedes-Benz and BMW, as well as a number of Chinese companies.