After months of Audi pondering which city in Mexico to build a factory, they have finally chosen Jose Chiapa City.
In order to enhance their business in the United States, Audi realise they have to bring production closer to the country. Currently they are growing faster than both BMW and Mercedes-Benz, although those two are well established. Building a factory in Jose Chiapa City will help Audi challenge their fellow German rivals.
This factory will see the Audi Q5 being built, a highly popular vehicle in the United States. To begin with there will be an investment of $1.3 billion within the plant. It is around 1 year off being finished. The plant will have a great capacity of 150,000 vehicles every year. Vehicles will start to be developed from the year 2016. That will arrive just in time for the new generation Audi Q5 compact crossover. This will generation will come with a hybrid and a diesel option for the first time. As American consumers are becoming more and more conscious regarding fuel efficiency, the sooner the Q5 is made more efficient the better. Q5 sales were down in the month of August by 12 per cent in the United States. The car has however reached a positive growth figure for the first 8 months of the year.
Mexico offers plenty of advantages to Audi. There are favourable cost structures and free trade agreements making everything a lot easier for the company to operate. Jose Chiapa City is centralised, making business a lot easier. There also suggested favourable employee prospects within that location.
Everything has been decided in conjunction to Audi’s 2020 plan. By that year they want to become the world’s undisputed number one car brand ahead of Mercedes-Benz and BMW. The German giant is targeting annual sales of 2.7 million by 2020. As mentioned earlier Audi are the fastest growing manufacturer in the world, but when will their growth reach a cooling period? For over 12 months Audi have been growing very well. There is a limit to what they can achieve in that respect. BMW and Mercedes-Benz will not give up their positions without a fight.
By 2018 Audi are hoping to sell 200,000 cars in the United States annually. Will Audi’s new plant in Mexico help them achieve that target as well as their 2020 target?