Volkswagen will only comment on the possibility of establishing an Audi plant in the United States after a tariff agreement is reached between the US and the European Union, according to an insider. The German automaker is offering a modular investment package, a person familiar with the matter said. The final size of this package will depend on the terms of the agreement. The insider did not provide further details. Recently, VW CEO Oliver Blume floated the idea of an Audi production facility in the US.
Currently, Audi is exploring various options for potential manufacturing in the US. One scenario being considered is producing vehicles for the global market in the US, Audi CEO Gernot Döllner said on the sidelines of an event in Ingolstadt. Volkswagen is also considering this as a long-term option. Döllner stated earlier this spring that a decision regarding an Audi plant is expected this year. Details about a possible location or specific models remain undisclosed, but the focus is likely to be on large, high-margin SUV vehicles.
At present, Volkswagen manufactures vehicles for the North American market--mainly for the US--at its Chattanooga facility in Tennessee. A new factory for the electric brand Scout is currently under construction in Columbia, South Carolina. Audi does not yet have its own production in the US and relies on imports from Mexico and Europe.
BMW and Mercedes already operate plants in the US, producing various SUV models for global markets. German automakers are lobbying the US government for a mechanism that would offset imports with exports from the US. According to an insider, Blume was in the US again just last week for further talks with the US government. The discussions were described as constructive. The industry needs clarity quickly, the company emphasized. Currently, US import tariffs on automobiles stand at 27.5 percent.
(Reporting by Christina Amann, edited by Sabine Wollrab and Myria Mildenberger. For inquiries, please contact our editorial team at Berlin.Newsroom@thomsonreuters.com (for politics and economy) or Frankfurt.Newsroom@thomsonreuters.com (for companies and markets)