Audi Mum On Mexico Plant; Delaying A6, A8 Hybrids

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Greater L.A. Auto Show

LOS ANGELES – Audi remains tight-lipped about any plans for a new vehicle-assembly plant in North America, hinting its U.S. sales volume does not warrant the capacity yet.

Supplier sources tell WardsAuto this week the German luxury brand will build a new facility in Mexico.

But Audi of America President Johan de Nysschen says “no decision has been made.”

“First of all, Audi of America has to earn its right to a factory,” he tells WardsAuto at the auto show here.

“We passed through the 100,000 (calendar-year sales) barrier last year for the first time,” he says. “Even the most modern and lean and efficiently constructed facility wants to produce 120,000 to 150,000 cars in order to be (profitable).

“If you want local content, you’ve got to get suppliers to set up with you, and they’re not interested in selling you 10 widgets,” de Nysschen adds. “They would like to sell a whole lot.”

However, given Audi’s continued ascendancy worldwide and in the U.S., where sales were up 16.5% through October to 95,206 units, a new plant likely will be necessary sooner than later.

In the “pro” column for a North American site with local content is a potentially large revenue stream.

Diesel being delayed for Audi A6 until 2013.

“We’ve doubled our size, and it will not be very long before you have as much as $10 billion, $11 billion, $12 billion of revenue that is hanging out there and exposed to exchange-rate fluctuations,” de Nysschen says.

Also to be decided is whether Audi would build a factory to supply vehicles exclusively for North America or for the global market, he says. “Those conclusions haven’t been finalized.”

Looking to next year, Audi of America will focus heavily on diesels.

Diesel variants of the Q5 cross/utility vehicle and A8 flagship sedan will launch in 2012. But a diesel version of the new A6 sedan, originally pegged for next year, may be pushed to early 2013, de Nysschen says.

A diesel A7 5-door sedan has “potential,” he adds, without putting a date on the introduction.

Also due in 2012 is a hybrid version of the Q5, but Audi is holding off on bringing hybrid A6s and A8s to the U.S. to minimize lineup complexity.

De Nysschen touts the success of the new A6, with deliveries up 14.1% through October.

Sales have risen in a stagnant segment, he contends, meaning the brand is conquesting sales from competitors.

However, the Mercedes E-Class is up as well, gaining 4.1% in the first 10 months. But neither the A6 nor the E-Class can keep up with the BMW 5-Series, sales of which soared 46.4% through October.

Audi expects roughly 17% of A6 sales to be the new S6 performance variant, which debuted here at the auto show.

That percentage is on par with the S4’s slice of A4 deliveries, de Nysschen says.

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