Audi goes down Mexico way

GERMAN prestige car-maker Audi says it will produce an SUV at an all-new factory to be opened in Mexico in 2016 – and the hot tip is that the vehicle in question will be the next-generation Q5.

American reports say almost three-quarters of the annual production of 120,000-to-170,000 vehicles from the new plant – a first for Audi south of the border – will be exported beyond North America, indicating Audi Australia is likely to source the mid-sized luxury SUV from Mexico instead of Germany when the second generation is due.

Audi Australia general manager corporate communications Anna Burgdorf said it was too early to say if any vehicles produced at the plant would come to Australia.

Currently, Audi Australia ships most of its models from Germany, but the new Q3 compact SUV comes from Spain.

Rivals BMW and Mercedes-Benz build their X5/X6 and M-class SUVs in the United States, which reportedly was the alternative for the Audi factory that the company board awarded to Mexico last night after weeks of speculation.

Among the luxury SUVs already built in Mexico is the Cadillac SRX, which was to have been built alongside the Saab 9-4X SUV until the collapse of the Swedish company last year.

The international nature of the Mexican plant was emphasised by Audi sales and marketing board member Peter Schwarzenbauer, who said: “It will be possible to supply customers worldwide with cars built in Mexico to Audi’s renowned standard of quality.

“In launching production operations in Mexico, Audi will enhance its own competitiveness and move significantly closer to its sales target of two million units per year by 2020.”

Audi said it has not yet selected a specific site for the factory within Mexico, adding that a decision on that would be made later this year, taking into account a requirement for a skilled workforce, as well as logistics.

Announcing the decision last night, Audi AG board chairman Rupert Stadler said Mexico was an established car-making location, offering an excellent economic basis for Audi production operations.

“Good infrastructure, competitive cost structures and existing free-trade agreements played a significant role in the choice of Mexico,” he said.

“This trailblazing move will help us safeguard our position on the world market. Our German locations, too, stand to benefit from it.”

Audi board member in charge of production Frank Dreves described the planned new plant as “a fully-fledged member of the Audi production network”, equipped with “the very latest standards in terms of resource efficiency and production processes”.

“Audi is all about premium quality no matter what the location,” said Mr Dreves.

Audi parent company Volkswagen already has a factory in Mexico, building the Jetta for global markets, including Australia.

The first-generation Q5 reportedly is in for a facelift for the 2013 model year, possibly arriving in Australia in the first half of 2013.

The A4-based Audi Q5 arrived on the Australian market in March 2009, becoming one of Australia’s top-selling luxury SUVs.

Last year, Audi sold 2801 Q5s, making it the brand’s second-best-selling vehicle behind the A4. In the luxury SUV segment, it was out-sold only by the new Jeep Grand Cherokee.

This year, Q5 sales were up 2.7 per cent, despite a 64 per cent slump in March as rival BMW introduced its all-new X3.