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Another indication of the complexity of the globalized auto industry came Monday with the news that Volkswagen is considering moving Passat production for the North American market to its facility in Mexico.
The reason for the move is currency issues, specifically a declining U.S. dollar and a strong euro. Coupled with inefficiencies in its German plants, including the Passat assembly plant, exchange rate problems have hampered VW's financial recovery in the North American market.

If it happens, the shift won't happen overnight - the plan would be to start producing Passats in Mexico by 2009. The reaction of German trade unions will be interesting, and the cynical among us might label this rumor as a company move to strengthen its bid for dramatic restructuring of its money-losing plants in western Germany, a move which is strongly opposed by the unions.

[Source: Reuters]

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    • 1 Second Ago
      • 9 Years Ago
      I agree with Arnie. Who wouldn't look askance at a vehicle made in a country mired in scandal, corruption and violence, and stereotyped as having a MANAÑA mentality. They may assemble the world's best cars and trucks in Mexico, but who's got enough extra dinero laying around to find out. As if there weren't enough problems with VW's reputation for unreliability.
      • 9 Years Ago
      If you don't want to buy mexican cars that's ok, but you can't say you never buy a car of these countries, and let me say that Mexico is one of the most great producers in the world, because it have a superior quality than other "first world" countries, that is the reason many automakes want to produce there.
      • 9 Years Ago
      Brilliant idea, as if VW wasn't having enough quality problems already.
      • 9 Years Ago
      I've got two VW's now. I'll NEVER buy að VW made in Mexico/Brazil/China etc. Never.
      • 9 Years Ago
      The Mexican/German/Brazilian argument is purely anecdotal. As of late, some of the newest crop of GTIs (German built) are being delivered with cloth headrests in leather eqiupped cars. And it should be noted that Volkswagen dumped billions (with a B) of euros into remodeling/revamping its Puebla, Mexico plant to gear up for the MkV Jetta.

      When Volkswagens have problems, it's usually because of crappy design or poor suppliers. Coil packs, window regulators, peeling interiors, bulbs burning out, latches/cupholers breaking - this is all BAD DESIGN, not bad workmanship.

      What it really gets down to it, disparaging the Mexican VW plant is disparaging Mexicans. Think about it.

      (Happy driver of a Mexican built VW)
      • 9 Years Ago
      I have a 1990 Mexican built Golf and I have to say it's in a lot better shape than the German made Jettas of the same age and the slightly older Golfs made in Germany. I think it's because they can afford to pay lower wadges in Mexico and spend more on more staff and more QC. The VW plant in Puebla Mexico wins award after award for quality.

      I think people are just racist and think Germans are somehow better than Mexicans. You know what? It's a system the workers are told what to do, it's not like you have some clever German dude figuring out how to attach that coil pack, he's given instructions.

      • 9 Years Ago
      Re Arnie,
      not that I doubt you, but you might want to double check the VIN#s of your cars. If the first digit ISN'T a W it was put together somewhere other than Germany.

      1...built in the U.S.
      2 Canada
      3 Mexico
      9 Brazil
      S (I may be fuzzy/wrong on this) U.K.
      far jr
      • 9 Years Ago
      Currency exchange rates are the reason I have given before as the REAL reason most foreign auto companies have built plants in North America. Not because they love us so much and want to help our people get good paying jobs, but for the simple fact that the price remains stable relative to the North American competition. Some have just done it smarter. Toyota and Honda have built plants in the USA in the consumers back yard giving the perception that if I buy a Honda I am helping out my country/ state/ community. Just look at the new Toyota truck plant, placed right in the heart of Americas largest truck market...Texas! VW simply went for the economical labor rather than the feel good (made in the USA) appeal that Toyota and Honda have used. The perception (and that is likely all it is) of Mexican made autos being inferior may hurt VW's recovery efforts!
      • 9 Years Ago
      After 13,000 miles, my German-built 1998 Passat had a blown coil pack (the first of two), a rattling dashboard, and a defective cruise control module. After the same number of miles, my Mexican-built 2006 Jetta has been trouble free (knock on wood). Let's face it, VW's problems have been their poor choice of suppliers, and not the country of assembly.

      Ford and I think Honda make cars in Mexico. VW already has a plant there. They don't have one here. It's easier to expand production at an existing plant than to build a brand new one.
      • 9 Years Ago
      Already denied by Volkswagen headquarters in Germany.
      • 9 Years Ago
      mick, stereotyped is the key word here. You're doing this to the cars produced there, and worst, to the people down there. Americans are so used to being stereotyped (politics, wars, economy, and the list goes on...) that is easy for some of you to get deffensive and begin labeling others.
      I bet that you wouldn't tell the difference between a mexican built Jetta and a German built one.
      • 9 Years Ago
      Automakers want to operate in Mexico for one reason. CHEAP LABOR!It's not because of superior quality. Just ask any owner of a Mexican built Jetta or New Beetle what they think of their cars. Not much.
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