Audi will begin construction of a new manufacturing facility in North America, according to Ward's Auto. While the German luxury manufacturer hasn't chosen a specific location as of yet, early whispers hint to a location in Mexico. Previously, Audi parent company Volkswagen had investigated the possibility of producing Audi models alongside its Passat sedan at the automaker's new facility in Chattanooga, Tennessee, but that options now appears to be off the table. Instead, Audi could be headed south of the border thanks to Mexico's labor flexibility and lower wages.

Audi boss Johan de Nysschen has been quick to say no final decision has been made, though the executive wasted no time in listing the advantages of a Mexican facility while at the 2012 Detroit Auto Show. The automaker has committed to a North American facility to protect its operations against currency fluctuations. According to de Nyscchen, the plant will need to have at least one vehicle line capable of producing 100,000 units to be economically viable. Last year, the company only moved 117,500 vehicles across all of its lines in the States. That means the facility would likely produce some vehicles for export, just as BMW does with its Spartanburg, South Carolina plant.


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