Audi officials may be cooling to the idea of assembling vehicles in Chattanooga because a decline of the euro against the dollar makes production here less profitable, reports indicate.
On top of that, the German luxury arm of Volkswagen still doesn't sell enough vehicles in the U.S. to warrant production in America, an auto analyst said.
"They need volume in total and in certain vehicles," said Michelle Krebs, senior analyst for the auto website Edmunds.com. "They don't have the volume of a single vehicle."
Fast factU.S. sales for German luxury automaker Audi will increase to at least 90,000 this year, company officials have said, or about 9 percent over 2009.Continue reading about Volkswagen in Chattanooga.
The auto publication Automobilwoche reported Monday that Michael Dick, Audi's product development chief, said U.S. production wouldn't pay off because of the currency exchange rate.
It also quoted Audi Chief Executive Officer Rupert Stadler as saying it doesn't need an American plant to make 1.5 million cars a year by 2015.
But he said if the decision is made to boost capacity, it could launch production in the U.S. in six months at an existing site rather than build a new facility, which would take three years.
Top VW officials in the U.S. have said the $1 billion Chattanooga plant the German automaker is building could be used for making Audis.
Stefan Jacoby, VW Group of America's chief executive until last week when he was replaced during contract negotiations, had earlier told Bloomberg news service the automaker is considering building Audis here, though it had not made a final decision.
Frank Fischer, who oversees VW's local operations, said in January that Audi production could work in the city's plant, but at "a later time."
Ms. Krebs added that what hasn't been said by VW officials is that Audi may be focusing on investing and selling more vehicles in high-growth China.
"Resources are limited. You put them where the growth is," she said.
VW's new Chattanooga plant is slated to start production early next year. The plant is expected to make a new midsize sedan.