Audi Latest Automaker To Plan North American Assembly Plant

German luxury carmaker follows sibling Volkswagen in building cars in the West

German luxury automaker Audi is the latest foreign carmaker to announce it will build a factory in the U.S., thus bringing valuable blue-collar manufacturing jobs to some lucky state.

Audi AG chief Rupert Stadler told trade weekly Automotive News that the company will finalize all decisions within the the next three years.

Despite the fact that Audi parent Volkswagen AG has just opened a new plant complex in Chattanooga, Tenn. capable of eventually building between 250,000-500,000 vehicles a year, Audi is expected to open its own assembly facility.

Stadler also said the company would look at building an engine and transmission plant. That, however, could be a plant or plants shared with VW.

If Audi's process of selecting a plant location follows the norm, it will hear from dozens of states hoping to land the assembly plant for the jobs and tax base. But southeastern states have a huge edge. Besides VW, Mercedes-Benz and BMW have located their plants in Alabama and South Carolina respectively, with auto suppliers setting up a network of facilities to supply the automakers.

Asian automakers Toyota, Nissan, Hyundai and Honda also have plants in Alabama, Tennessee and Kentucky.

Audi has been growing worldwide and in the U.S. Worldwide, Audi sold 1.1 million vehicles in 2010. Last year, the company sold 101,629 in the U.S. It has a plan to sell 150,000 by 2015 and 200,000 a year by 2018.

"It is totally clear that we need new production capacity in the U.S.," Stadler said in an interview with Automotive News. "The question only is when."

One of the challenges for Audi will be building a plant that can operate efficiently at low volumes and be flexible enough to manufacture both sedans and SUVs. Because North America is a stronger market for SUVs than Europe or Asia, it is likely that Audi will build its Q7 and or Q5 SUVs at the North American plant. It could also end up exporting those vehicles to other markets.

Share This Photo X