Back in mid-2010, Audi boss Rupert Stadler was quoted saying that the brand did not need a US plant until Audi was selling 1.5 million units a year globally, and more than 10% of these in the US, something it was expecting to achieve by 2015. He added that Audi could build a car within the new Volkswagen plant in Chattanooga within six months, but building a new factory would take three years. Fast forward a year and the automotive press is buzzing with reports that Audi will soon confirm plans to build a plant in North America. All that remains to be decided is where the factory will be built and what it will make – all of which will be decided within the next 12 months; fast forward another 12 months, and we will be in mid-2012, with three years to build a new factory ready for a 2015 start.
So, has much changed, and why the press excitement?
2011 has been an unusual year, with rising sales at many vehicle companies despite the widespread market uncertainty. China has become Audi’s largest market, while its German factories are working round the clock to meet demand which currently sees some models having six month waiting lists. Expansion at Gyor in Hungary is proceeding apace and planned investment there will see this plant transformed from a final assembly operation into a full manufacturing plant, complete with its own press plant.
Audi is undoubtedly concerned that its European factories will be unable to cope with current levels of global demand for much longer and also produce the wider model range under consideration.
Meanwhile, reports have suggested that the Q range of off-roaders will be expanded so that every number from 1 to 7 could have a Q model, while other press reports have suggested that an A2 and even an A9 will appear, rounding out the core Audi range.
With all this expansion continuing unabated, and further derivatives of this growing model programme undoubtedly also under development, it is not surprising that the idea of an Audi plant in US has begun to be spoken of with increasing certainty – which brings us back to the question of what exactly will happen and when.
On the one hand, in practice not much has changed in terms of timing if an Audi-specific factory is to be built; the company has said that a final decision will be made next year, with the first model coming off the North American production line three years later – much as Audi has been suggesting would be the case. However, Audi is undoubtedly concerned that its European factories will be unable to cope with current levels of global demand for much longer and also produce the wider model range under consideration. To ease the pressure on its German factories especially, Audi has already given production of the Q3 to the Seat factory in Spain and some press reports have indicated that the proposed Q4 sporty version of the Q5 may be made by Porsche on the same line as the Porsche Cajun. It would not be surprising if an Audi model were also added to the VW plant in the US to bring forward North American production and ease the pressure on the German factories.
Audi’s recent spectacular growth has taken it alongside and indeed ahead of BMW and Mercedes-Benz, and it is now in pole position to become the leading German premium brand. And to sustain this position, production in North America is inevitable, both alone and jointly with Volkswagen.
So yes, things have changed. Audi’s recent spectacular growth has taken it alongside and indeed ahead of BMW and Mercedes-Benz, and it is now in pole position to become the leading German premium brand. And to sustain this position, production in North America is inevitable, both alone and jointly with Volkswagen.
The US automotive press is full of speculation as to what could be made in North America – would it be the A4 which shares components with the Passat, or perhaps the Q5, which would see Audi following the decision of BMW and Mercedes-Benz to make SUVs in the US? And where might the new factory be located? Locating in the Detroit area seems most unlikely; a plant in the south-east of the US, where BMW, Mercedes-Benz, Hyundai and Kia have plants seems much more likely. With all the recent press reports and excitement, it would not be surprising if we received official confirmation of Audi’s actual plans around the time of the Frankfurt motor show (September 2011), a full six to nine months earlier than expected.
The opinions expressed here are those of the author and do not necessarily reflect the positions of Automotive World Ltd.
Ian Henry is a director of AutoAnalysis, an independent automotive research and consulting company based in London.
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