In a strategic move to strengthen its presence in the Mexican market, Chirey Motor Mexico, a renowned Chinese automotive brand with transnational reach, signed a strategic alliance with DHL Supply Chain, the international logistics company. This agreement, formalized on November 16, 2023, aims to improve delivery times and optimize the distribution process of parts and spares in the country.

Before this alliance, the Asian company faced challenges in its distribution operations, limited by a storage space of 2,000 square meters and extended shipping times. However, the collaboration between the two companies will allow Chirey to strengthen its inventory and significantly shorten shipping deadlines, thus improving the availability of its products to raise its fill rate from 82% to 92% in a context where the average fill rate in Mexico is 90%, according to data from DHL.

Operational improvements in Chirey's supply chain will be achieved by moving more than 92 containers (containing 240,000 pieces) from the old warehouse to a new one with 6,000 square meters and an expansion capacity of up to 10,000 square meters. Additionally, with the help of DHL, the Asian company will be able to maintain a constant reception of 30 containers per month.

DHL's extensive logistics network plays a fundamental role in redefining supply chains in Mexico. According to SiiLA, the company owns about 600,000 industrial square meters in the country's leading real estate markets, with a notable concentration (78%) in Mexico City and Monterrey. The strategic distribution in high-demand markets and the extensive infrastructure of the German company allow it to offer advanced logistics management services, with integrated and customized solutions, from storage to final delivery, that facilitate a quick and efficient response to market demands, improving the competitiveness of companies like Chirey in the global arena.

The optimization of Chirey Motor Mexico's supply chain will significantly impact the automotive company and its subsidiaries, Omoda, Jaecoo, and EXEED. The expanded storage capacity will allow it to safeguard the equivalent of 120 million pesos (over 7.1 million dollars) in vehicle parts or enough products to cover orders for seven months.

In Mexico, the expansion of Chinese automotive companies has been notable in the industrial real estate market. According to data from SiiLA, the gross leasable area (GLA) of these companies –including Yanfeng, Minth, and Shanghai Daimay– increased by 23% between 2022 and 2023.

Starting this year, Jaecoo will also seek to install a production plant. According to Alex Lee, business director of Chirey Mexico, although it is still a project, his subsidiary is in talks with government representatives to determine the settlement location. In that sense, the executive has made public that, in addition to the agreement with DHL to store up to 15,000 vehicle parts of Jaecoo, Chirey's subsidiary has a strategic alliance for vehicle sales in Mexico with the financial group BBVA.

For more information about this and other strategic commercial alliances that influence the development of Mexico's industrial real estate market, explore SiiLA REsource or write to us at contacto@siila.com.mx.