Audi: Mexico & More
In September, Audi announced that it will build its first production plant in North America, which is scheduled to start producing the successor to the current Audi Q5 sport ute by 2016. The plant will be located in San José Chiapa, in the State of Puebla, Central Mexico.
The plant will have a planned capacity of 150,000 vehicles per year.
“The new plant in San José Chiapa will be the most modern in the Audi production network for its efficient use of resources and production methods,” stated Frank Dreves, Audi board member for Production. He added, “The Audi Production System means we build cars of premium quality at every single one of our sites.” And there will be more sites, well beyond the boundaries of Ingolstadt.
This past May, Audi CEO Rupert Stadler, in a speech at the 123rd Annual General Meeting of Audi AG, explained the rationale by saying, “Audi is building a plant in Mexico! That is a fundamental strategic decision: First, for the North American market. We want to reduce our exposure to exchange-rate fluctuations. When manufacturing costs and sales revenues are both denominated in dollars, we minimize our risk. But it is also about growth opportunities in other regions. Mexico is part of several free trade agreements. This will allow us to ship our cars duty free to the U.S.A., Latin America and Europe. Consequently, with the successor to the Audi Q5, we will be manufacturing a model in Mexico for the entire global market. Mexico is already the world’s eighth-largest car manufacturing nation.”
(Mexico is not the only place where Audi is adding or expanding its capacity: it is expanding its plant in Györ, Hungary, and is building an assembly plant in Foshan, China, which will be complete in late 2013.)
But there was an interesting comment made by the chairman of the Audi General Works Council coincident with the announcement of the siting of the Mexican assembly plant. Said Peter Mosch: “The new location in Mexico will unlock further growth for us, and also protect capacity at the main plants. The latter will increasingly step into the role of lead plants for our technologies in developing modern production methods, using new materials and joining techniques, and with regard to electric mobility. For the employees”—Audi has 65,000 employees worldwide, of whom about 48,000 are based in Germany—“this solution offers not just secure jobs, but also additional career prospects. And we have concluded an employment guarantee agreement with the company until the end of 2018.”
Note the fact that Mosch mentioned the development of new processes and the use of new materials and joining techniques, as well as electric vehicles. Clearly there is an on-going emphasis at Audi to stay at the forefront of technological developments, which will be key to any vehicle manufacturer’s success—especially those in the premium end of the market, as Audi is—going forward.