Bloomberg News

Volkswagen Plans Mexico Audi Factory in BMW Challenge

April 17, 2012

Volkswagen AG (VOW) is set to approve building an Audi factory in Mexico to bolster the brand’s pursuit of Bayerische Motoren Werke AG (BMW), a person familiar with the situation said.

Volkswagen’s supervisory board will vote tomorrow on plans for the plant, which will supply Audi vehicles to the U.S. and Latin American markets, said the person, who declined to be identified because the meetings are private.

Audi, which sells about half as many cars in the U.S. as BMW and Daimler AG’s Mercedes-Benz, is looking to catch up with its German rivals in North America. The brand seeks to increase sales in the U.S. to 200,000 by 2018 from 117,600 last year.

The decision would come about a year after Volkswagen opened a factory in Tennessee, the group’s only U.S. plant, to shore up efforts to overtake General Motors Co. (GM:US) as the world’s biggest carmaker. BMW produces vehicles in South Carolina, while Mercedes assembles cars in Alabama.

Walter Hanek, corporate director of Audi’s Mexican unit, said Volkswagen wants a new North American plant, without specifying in which country.

“The way Audi is growing right now, there will be a need for this new production,’’ Hanek said today in an interview on the sidelines of the World Economic Forum on Latin America in Puerto Vallarta, Mexico.

Hanek declined to provide additional comment on the potential plant, saying the matter was in the Volkswagen supervisory board’s hands.

“Mexico is doing a great job at producing and exporting vehicles,’’ Hanek said.

To contact the reporter on this story: Chad Thomas in Berlin at cthomas16@bloomberg.net

To contact the editor responsible for this story: Chris Reiter at creiter2@bloomberg.net


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