Chery weighs a Canadian car plant, but Ottawa set majority Canadian ownership terms in June

Chery Automobile (HKEX: 9973) is considering building cars in Canada, executive vice-president Zhang Guibing said in an interview at the company's headquarters in Wuhu, published October 23, 2026. The options include taking over idle capacity at existing plants and working with partners. Zhang named no companies, sites, timeline or volume.

Chery has not yet sold a car in Canada. Vice-president Charlie Zhang said in an interview on October 21 that the company is preparing a brand launch in Canada early next year, a timetable that has already slipped from the fourth quarter of 2026 he gave in an interview in April. Zhang Guibing still called Canada "a market that is worth having a factory for manufacturing," even without access to the United States.

If it happens, according to one report, Chery could become the first Chinese automaker with a manufacturing presence in Canada. That needs a footnote. BYD (HKEX: 1211) opened a bus assembly plant in Newmarket, Ont., in 2019, and its only vehicle output was 10 electric buses for the Toronto Transit Commission. The plant ceased operations after that order, and the building has since been sold.

What Chery described is closer to a deal than a greenfield factory. Zhang said it is assessing idle capacity and speaking to investors in Canada who are interested in Chinese automakers, and he talked about bringing in money from several parties rather than only from Chery. Charlie Zhang, he added, has been in frequent communication with Industry Minister Mélanie Joly.

Joly's terms are the hard part. Before her June trip to China, she said any Chinese auto investment must be a joint venture that is majority Canadian-owned, follow Canadian labour standards, use Canadian parts and run secure software that protects drivers' data. Her message to four Chinese automakers was blunt: "build where you sell." She has also said she wants Canadian companies doing contract manufacturing for Chinese EV makers, pointing to a Magna International (TSX: MG) subsidiary that builds cars for XPeng (NYSE: XPEV) in Austria.

Those four were BYD, Chery, Geely and Shanghai Launch Automotive Technology. After meeting them, Joly said all were willing to explore joint ventures to produce in Canada, with the joint venture Canadian-controlled and the supply chain localized. Any such investment also needs her approval as minister responsible for the Investment Canada Act. Prime Minister Mark Carney has framed the January EV deal with Beijing as a way to draw "new Chinese joint-venture investment in Canada" and create auto manufacturing jobs.

Joly has also ruled out the quickest route. In April she rejected a Stellantis (NYSE: STLA) plan to assemble Leapmotor EVs from kits shipped from China at its idled Brampton, Ont., plant. "We can't bring cars in a kit to Canada," she told reporters in Vancouver, adding that production must support the local supply chain.

Zhang did not say whether Chery would accept a minority stake in a Canadian venture, or which side would control it. His comments on bringing in partners and outside investors would fit a joint venture structure, but neither Chery nor Ottawa has described a proposal.

Chery has used the idle-plant route before. Chery SA agreed in January 2026 to buy Nissan's (TYO: 7201) Rosslyn factory and a nearby stamping plant in South Africa, with most of the Nissan staff offered jobs on similar terms. The plant, built in 1963, was officially opened on July 3, 2026, with Zhang Guibing among the executives at the ceremony.

Chery chairman Yin Tongyue guides South African Deputy President Paul Mashatile past exhibits at the Rosslyn opening on July 3, 2026 (Chery)

The Rosslyn numbers show how slowly a takeover turns into cars. Chery has committed to keeping all 692 existing employees, but production is due to start only in mid-2027, with 15,000 units planned for the ramp-up in the third and fourth quarters. At full production it will have annual capacity of 50,000 vehicles per shift, and Chery is targeting 40% localization by 2028. It wants the site to anchor more than 100,000 annual sales in South Africa, where it said in July that it ranked second among passenger vehicle brands by sales this year.

South Africa is one of several plants abroad. Chery also has a joint venture plant in Spain to deal with European Union tariffs and quotas, and it is exploring production at Nissan's Sunderland plant in the United Kingdom.

In Canada, the opening for Chinese brands is still the import quota. Since March 1, 2026, up to 49,000 China-built EVs a year can enter at a most-favoured-nation tariff of 6.1%. In the Global Affairs Canada report updated October 23, 15,931 permits had been used and 33,069 remained, with 328 recorded in September and none so far in October.

The quota covers every brand that builds EVs in China, not only Chinese ones. A Nissan spokesperson told one Canadian outlet earlier this year that the deal's limits and its first-come, first-served permits made it hard to plan a product line around China-built cars.

Chery will not be the only Chinese company eyeing Canadian capacity. BYD has said it is considering a plant, and in late August Brampton Mayor Patrick Brown said BYD had asked about making buses at the idled Stellantis factory, though his office later said BYD had no immediate interest. Geely is due to start selling cars in Canada next year but has not said publicly whether it is considering manufacturing here.

Washington is watching. US officials have said Chinese cars from Canada will not cross the border, while President Donald Trump suggested in September that he might let a Chinese automaker build in the US and employ local workers. Whether Chery will accept a Canadian majority partner in order to build here is the question Zhang left open.