Audi eyeing U.S. site, CEO says

Audi eyeing U.S. site, CEO says

December 21st, 2011 by Mike Pare in Business Around the Region

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 Edmunds.com.

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.