Magna would run the plant and build the vehicles. The arrangement would be similar to Magna's setup in Graz, Austria, where the Aurora, Ontario, supplier's Magna Steyr unit has built cars for Chrysler, Porsche, Mini, Peugeot, BMW, Saab and Aston Martin.

 

"I'm heavily involved in it," Willi Ewers, Magna Cosma International's vice president for Latin America, told Automotive News in a phone interview.

 

But the Mexico-based Ewers declined to identify the Chinese company. "We are not so far advanced that we can make a press announcement," he said. "These are only preliminary discussions."

 

There was no "concrete date" for completing the talks, but a deal might be done this year, Ewers said.

 

A leading Mexican automotive industry official who confirmed the negotiations also declined to identify the Chinese company.

 

China FAW Group Corp. is supposed to start assembling cars at a plant to be built in Michoacan state, Mexico, in 2010. But a source at Grupo Salinas, FAW's joint venture partner in the GS Motors project, said this week: "Things are behind schedule, and we are weighing a lot of alternatives."

 

GS Motors named former Ford Motor Co. and Tower Automotive Inc. executive Kathleen Ligocki its CEO last August. In January, she told the Automotive News World Congress that China-designed cars assembled in Mexico could be on sale in the United States within five years and in Canada before that.

 

Since 2007, GS Motors has been selling FAW cars imported from China in Mexico.

 

Magna has announced plans to add three plants to its 21 in Mexico by late 2010.