Chattanooga, Mexico eyed for Audi plant, report says

Chattanooga, Mexico eyed for Audi plant, report says

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

A report Wednesday said Volkswagen and Audi executives are looking at Mexico and Chattanooga for production capacity for VW's upscale brand.

Manager Magazin said Audi Chief Executive Rupert 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.

The Chattanooga plant this spring started production of an all-new midsize VW Passat. It has capacity to make 150,000 vehicles a year. VW officials have said the plant ultimately could be expanded to build 500,000 vehicles a year.

The German magazine said a decision on Audi production could be made as early as October.

J.Ed. Marston, the Chattanooga Area Chamber of Commerce's vice president of marketing, declined comment Wednesday. But, Marston said last week that local economic developers are building ties with Audi and VW officials.

Audi does not have its own factory in the United States, but VW has a large plant in Puebla, Mexico.

Michael Macht, VW's board member in charge of worldwide production, said in Chattanooga for the plant's grand opening in late May that it's concentrating on launching the Passat, though the new facility has plenty of room.

"We don't have concrete plans," he said. "We're working on that. Let's wait and see."

Some published reports have hinted that a new VW crossover could be produced next at the plant to compete with the Ford Explorer.

Last week, Audi CEO Stadler told Automotive News that it's clear the automaker needs capacity in North America. Audi sales rose 16.9 percent in June to 10,051 vehicles.