VW to Decide on North American Audi Plant Location image

Volkswagen AG is expected to make a decision until the summer of 2012, on where to build the Audi’s North American plant and what model to assemble there.

The company plans to bring another Volkswagen SUV, larger than the Tiguan, to the States. Opening a North American plant will mean aggressive growth plans, such as reaching U.S. sales of 200,000 units by 2018.

In 2011 Audi managed to sale 117,561 units in the States (16% up compared to 2010) and for 2012 it hopes to make similar gains, although they have short supplies of key models such as the Q5 and Q7 SUVs.

The company has two locations to choose from: Mexico and the US, each with pros and cons. On the one hand Mexico will translate in duty-free trade among Mexico, Europe and the Mercosur countries (Brazil, Argentina, Uruguay and Paraguay).
VW already has a plant in Puebla, Mexico where the Beetle and Jetta are built, and from 2013 it will have also an engine plant in Silao, Mexico which ill offer 300,000 engines a year.

On the other hand the U.S. are also very important for the company’s image and future sales. The States have the advantage of the strong existing supplier structure. Hopefully the company will make its mind soon.