Audi has announced that it will build its first North American manufacturing plant in Mexico. The German automaker’s growth in the region, as in the rest of the world, has been unprecedented, but it still has a long way to go before catching up to the likes of BMW and Mercedes-Benz. The demand is likely there, but supply hasn’t kept up.
The company is betting on a North American plant to help satiate demand in the region, as well as to help it achieve an ambitious goal of selling 2 million cars annually by 2020. Volkswagen, Audi’s parent company, said it chose Mexico over the U.S. because it offered a better cost structure.
“Good infrastructure, competitive cost structures and existing free trade agreements played a significant role in the choice of Mexico,” said Rupert Stadler, Chairman of the Board of Management of AUDI AG. “This trailblazing move will help us safeguard our position on the world market. Our German locations, too, stand to benefit from it.”
The Mexican plant will produce “an SUV model,” but Audi didn’t specify what that model will be, nor has it given any indication on how many vehicles the plant will produce annually.