Audi officially confirms plans to build a plant in North America

Article by Christian A., on January 18, 2012

A top U.S. Audi official has confirmed that a plan to construct the first vehicle-assembly plant in North America has been approved but the location and area have yet to be announced. What’s to be removed from the list of potential sites is the Chattanooga, TN, facility, the home to parent Volkswagen’s new Passat plant and a onetime front-runner site for an Audi plant.

Meanwhile, Mexico seems to be very probable. In a WardsAuto interview, supplier sources said last November that this may be Audi’s selected locale. CEO Rupert Stadler said that Mexico has advantages when it comes to labor flexibility and lower wages.

Audi of America President Johan de Nysschen is adamant that a decision has yet to be made. However, he mentions the benefits of Mexico when he was interviewed during the North American International Auto Show this week. De Nysschen confirmed that a plant will rise in North America and that it’s just a matter of when the construction will start.

Even if the recent economic troubles of the European Union mean that in the short-term, Audi will gain in the U.S. due to a weaker euro, it will still have to have production in the dollar zone as a hedge against adverse currency fluctuations.

De Nysschen said that Audi’s exposure to the exchange rate grows as its business in the U.S. increases. He added that very soon, Audi will be a $7.5 billion business. How Audi performs in the U.S. determines when the decision is made, adding that for local production to be viable, there has to be one vehicle line at a volume of at least 100,000 units annually. [source: Ward's Auto]

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