One of China’s largest car manufacturers, GAC Motor, is considering installing an assembly plant in Panama if the free trade agreement (FTA) that both nations are negotiating is successfully concluded.

 The company opened its first distributorship for Central America in Panama on Friday, October 25.

,  general manager of International Sales of the multinational, said in an interview with the EFE news agency  that the FTA would allow the company to "consider Panama as a place to establish a vehicle assembly plant."

Founded in 2008, Guangzhou Automobile Group Motor Co. Ltd (GAC MOTOR) produces two million light cars and SUVs every year. Its products include sedans, utility vehicles and 100% electric vehicles, according to company information, which is ranked 189 on the Fortune Global 500 list.

Panama and China entered into diplomatic relations in June 2017 and a year later they began negotiating a free trade agreement (FTA), a process that involved five rounds and has remained suspended since last April when the last one in Beijing concluded.

The change of government in Panama, on July 1, and possible revisions of what has already been negotiated, is the reason for the delay in the commercial negotiation process, according to Panama’s government.

"We are very involved analyzing the terms and conditions" of the free trade agreement, said Zeng Hebin who participated Friday in the inauguration of the first point of sale and distribution of parts of the Chinese manufacturer in this country and in Central America.

This distributor, which offers the brand's SUV series, is the product of a cooperation agreement between the Panamanian Grupo Auto Commercial and GAC Motor, a manufacturer that is also present in Ecuador, Bolivia, and Paraguay.

The Panamanian partner has arranged an investment of $4.5 million dollars to build the showroom whose management and operation "demands the generation of 100 new jobs", to work for the purpose "of increasing the influence of the brand, whose sales abroad in 2018 increased by  68%, said a  GAC Motor statement.

Panama downturn
The company arrives in Panama where new car sales have been falling.

In 2018, 50,889 new cars were sold, 10.6% less than in 2017, when sales also fell, by 14.7%, compared to 2016.

According to official statistics, the trend has continued this year, as sales of new cars between January and August fell 5.6%, although the SUV segment grew 0.5%.