published Wednesday, December 21st, 2011

Audi eyeing U.S. site, CEO says

Audi continues to weigh whether to build a new North American plant and some analysts think the United States has an edge over Mexico -- which would benefit Chattanooga's bid for the factory.

"Typically, automakers go to Mexico for cost-sensitive reasons and lower-priced vehicles," said Michelle Krebs, senior auto analyst for

The Wall Street Journal on Tuesday reported that Audi Chief Executive Officer Rupert Stadler said the VW luxury brand is still mulling a plant in Mexico or the U.S. with production likely to start as soon as 2015.

J.Ed. Marston, the Chattanooga Area Chamber of Commerce's vice president of marketing, said Chattanooga is building ties with Audi and VW officials and positioning the city's Enterprise South industrial park.

"We're making connections and making sure they're aware of our assets," he said.

VW built its new Enterprise South assembly plant on about 1,300 acres at the industrial park.

The German automaker also has an option on an adjacent 1,000 acres the city and county have reserved for VW.

But Mike Randle of Southern Business & Development magazine said he has information related to a Huntsville, Ala., landowner who indicated Audi is looking there now.

Randle said VW and Audi could utilize the same formula as Hyundai and sister company Kia. Hyundai built a plant in Montgomery, Ala., while Kia later raised one in West Point, Ga., 81 miles to the east near the Georgia-Alabama state line. Both companies share suppliers that have built factories near each plant.

"There's a rail line going to Chattanooga" from Huntsville, Randle said.

Huntsville makes more sense for a possible future Audi plant than Chattanooga, he said. VW will have its hands full with building capacity for the existing Chattanooga plant, which now produces the Passat midsize sedan, Randle said.

He, too, said the U.S. has an advantage over Mexico in landing a potential Audi assembly plant.

"I'd be surprised if they went to Mexico," Randle said.

Worldwide, Audi is slated to pass Mercedes-Benz to claim the No. 2 spot behind BMW in luxury vehicle sales this year.

In the U.S., Audi is growing as well and wants to close the sales gap with Mercedes and BMW.

In July, a German magazine reported that VW and Audi executives are looking at Mexico and Chattanooga for production of VW's upscale brand.

Manager Magazine said Audi CEO Stadler wants a new factory in Mexico to produce the sport utility vehicle Q5. But, the report said, many members of Volkswagen's top management would rather produce Audi vehicles in Chattanooga.

VW's local plant employs about 2,500 workers.

about Mike Pare...

Mike Pare, the deputy Business editor at the Chattanooga Times Free Press, has worked at the paper for 27 years. In addition to editing, Mike also writes Business stories and covers Volkswagen, economic development and manufacturing in Chattanooga and the surrounding area. In the past he also has covered higher education. Mike, a native of Fort Lauderdale, Fla., received a bachelor’s degree in communications from Florida Atlantic University. he worked at the Rome News-Tribune before ...

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ditdahdit said...

Let the bidding wars begin! No sense in standing up straight and buttoning up our pants just yet - reassume the position you Hamilton County and TN taxpayers.

December 21, 2011 at 8:29 a.m.
fechancellor said...

With all the infrastructure in place out at the VW, the price to land Audi should significantly less than the original investment. Also favoring Chattanooga the relative speed with which Audi can build its plant without the burden of starting from scratch at another site.

I read somewhere today that some citizens are upset by the Mayor's Delegation that went to new "Sister City" Wolfsberg last week.

Normally, I disdain these Junkets by city and county officials as nothing more than a paid vacation.

This time Mayor Littlefield availed himself every opportunity to spend true "quality time" with the VW leadership, surely making Chattanooga's preliminary pitch for Audi at a critical time.

What I can't see is Audi marketing a $50K or more vehicle built in Mexico. Between the deadly violence between drug lords along with the penchant for bribery and extortion by individuals in the government. Mexico seems not be the place to drop a $2 billion at this time.

December 21, 2011 at 1:25 p.m.
solomon11 said...

Relax people! They won't consider Chattanooga. You're beloved tax dollars are not going anywhere.

December 21, 2011 at 3 p.m.
trumpet123 said...

They will be here. Bet on it.

December 21, 2011 at 6:52 p.m.
98flsts said...

Audi is currently looked at as, perhaps, the premier luxury auto from Germany. MB and BMW have lost many followers and Lexus drivers are looking to something new - and not the MBor BMW. But the US market will NEVER accept a "luxury" car built in Mexico. If the Audi and VW leadership do not grasp this concept, they will miss a huge opportunity. Americans buy Mexican and Chinese goods to save money - not for status reasons. A Mexican built Audi will be a laughing stock - regardless if it is $10k less than the competition.

December 22, 2011 at 10:55 a.m.
LarryPage said...

I think this is a good move by Audi. You have to have a good site to make good cars and good car accessories. With this Audi will continue to build great cars for the next 10 years.

February 8, 2012 at 9:28 p.m.
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