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Audi picks Mexico over U.S.

 

Audi picks Mexico over U.S. for its Factory

 

                       

By Chris Woodyard, USA TODAY

Updated 20m ago

 By Chitose Suzuki, AP

After a bit of drama and what we're sure was a lot of lobbying, Audi has decided to build a factory in Mexico. It made the announcement today.

 

Audi says it hasn't decided exactly where in Mexico to site its plant. It will make SUVs starting in 2016. We suspect that means the big Q7 or the hot-selling Q5. Audi was careful to say that it plans to make sure that making vehicles in Mexico doesn't harm its luxury brand status.

Sister brand Volkswagen has long had a plant in Puebla, making cars for both the U.S. and Mexico. But VW also opened its first production plant in the U.S. in a decades about a year ago in Chattanooga, Tenn., leading to speculation that luxury maker Audi might follow suit. It didn't.

Mexico is an interesting choice right now considering how the nation is being ripped apart by spreading drug violence, which Audi didn't mention. "As an established carmaking location, Mexico offers an excellent economic basis for Audi production operations," said Rupert Stadler, Audi's chairman in a statement. "Mexico is one of the world's top ten automotive locations and offers a blend of tradition and experience."

He also lauded it as having good infrastructure, competitive cost structures and existing free trade agreements. General Motors, Chrysler and Ford all make vehicles or components in Mexico that are shipped to the U.S.

Sure, it would have been a boost to the U.S. auto industry if Audi had located a new plant here, but analysts aren't surprised:

"The Volkswagen Group has a well-established and highly regarded manufacturing presence in Mexico, so it's logical for its Audi brand to use that advantage," Edmunds.com Senior Analyst Bill Visnic said in a statement.


Published Thursday, April 19, 2012 11:28 AM by David Biondolillo

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