With a new manufacturing facility literally rising from the high plains desert outside the city of Puebla, Volkswagen AG’s luxury unit Audi is only the latest in a series of automakers taking advantage of what Mexico has to offer.
Recently, a growing number of automakers and auto parts suppliers are attracted to build new plants in the Central American country thanks to lower labor costs then its North American neighbor, but, more importantly – by the highly efficient network of free trade agreements negotiated in recent years by the local government.
“This marks the point at which we will build more cars outside Germany than at home,” says Klaus-Peter Koerner, the plant manager at the facility set to open mid-2016. “We will become the first premium carmaker here, so all eyes are on us.”
Actually, the $800 million investment would become the soul global provider for Audi’s entire next-generation of the Q5 sport utility vehicle. Other general manufacturers are already present in Mexico – like Ford, Honda, Chrysler, Nissan or Volkswagen.
The Puebla project, at a total cost of $1.3 billion (the plant and the Q5 development), is a critical one for Audi and the size of the manufacturing facility, which has an initial installed annual production capacity of 170,000 cars, suggests more products could be manufactured here on the long run.