Audi will focus on buying in North America for new plant in Mexico

By Stephen Downer
Correspondent

Published: May 20, 2014 4:13 pm ET
Updated: May 20, 2014 4:21 pm ET

Image By: Stephen Downer Klaus-Peter Körner, who will head production at Audi's new plant in Mexico, said it already has lined up 130 suppliers.

Related to this story

Topics Canada Mexico United States Automotive
Companies & Associations

SAN JOSÉ CHIAPA, MEXICO — Suppliers of Audi AG’s first assembly complex in North America will buy most of their raw materials from within the region, according to the German auto maker.

“Ninety percent of our raw materials, including plastics resins, will come from NAFTA [countries],” Bernd Martens, an Audi board member in charge of the company’s procurement, told reporters.

Components such as interior mirrors, door panels, wire harnesses and dashboards will be supplied from a “just-in-sequence” (JIS) supplier park. Construction on the park started May 14.

For months Audi has been saying that to comply with NAFTA rules on exports, 65 percent of the value of the content of the vehicles it assembles in Mexico must be from North American Free Trade Agreement signatories: the United States, Canada and Mexico.

“We have reached that target,” Martens said in a speech at the park’s groundbreaking ceremony. Audi plans to increase local content to 90 percent in the medium term, he said.

The JIS park is scheduled to open this year and will employ 1,000 at startup, according to Audi. The park is located alongside Audi’s $1.3 billion assembly complex, which is under construction in the municipality of San José Chiapa, 40 miles northeast of Puebla. The complex is scheduled to start producing the Q5 SUV in 2016.

Image By: Stephen Downer Bernd Martens, a member of the board of management for Audi AG, during an event for its new plant in Mexico.

To date, seven suppliers have agreed to work with Audi at the park, according to Klaus-Peter Körner, head of production at Audi Mexico.

Martens said Audi has 130 suppliers signed up to supply the new plant, and Audi has placed orders for 80 percent of the parts it will need for the Q5. Some 75 percent of the suppliers are in North America.

Audi will produce 150,000 Q5s a year in San José Chiapa. “We may even double production,” Martens said. “In time we will review our plans. I believe this will be a sustainable project.”

Asked why Audi decided to build the factory in Mexico rather than in the United States, Martens replied: “Because this project is for world production. We needed a place which has [many] free-trade agreements” — Mexico has done free trade deal with 40-plus countries.

Puebla also is home to Volkswagen AG’s largest assembly plant in the Americas.


Comments

Audi will focus on buying in North America for new plant in Mexico

By Stephen Downer
Correspondent

Published: May 20, 2014 4:13 pm ET
Updated: May 20, 2014 4:21 pm ET

Post Your Comments


Back to story


More stories

Image

Toyota investing $1 billion in Mexico

April 15, 2015 11:27 am ET

Toyota Motor Engineering and Manufacturing North America Inc. said April 15 it will build a $1 billion manufacturing facility in central Mexico to...    More

Image

GN Thermoforming changes management following founder's arrest

April 15, 2015 4:47 pm ET

GN Thermoforming Equipment officials say Georg Nemeskeri has stepped away from active involvement with the company he founded 34 years ago and a...    More

Image

Canadian recycler headed for auction block

April 14, 2015 3:17 pm ET

A Canadian recycling company that could not climb out of a financial hole will have its assets sold at auction.    More

Image

Inteplast buys Canadian film maker Haremar, bag maker El-En

April 13, 2015 4:29 pm ET

Inteplast Group has increased its business in Canada with the acquisition of a specialty polyethylene blown film coextruder.    More

Image

Study: Most plastics recycled in Canada stays in North America

April 13, 2015 3:41 pm ET

Most post-consumer plastics packaging collected in Canada finds a home in that country and the United States, according to a recently released study.    More

Market Reports

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Injection Molding Market Analysis & Processor Rankings

Plastics News BUNDLED package contains our in-depth Market Analysis of the Injection Molding segment. You will gain keen insight on current trends and our economic outlook.

As a BONUS this includes PN's updated 2014 database of North American Injection Molders RANKED by sales volume. Sort, merge, mail & prospect by end market, materials processed, region, # of plants and more.

Learn more

Plastics Caps & Closures Market Report

The annual recap of top trends and future outlook for the plastics caps & closures market features interviews with industry thought leaders and Bill Wood’s economic forecast of trends in growing end markets. You will also gain insight on trends in caps design, materials, machinery, molds & tooling and reviews of mergers & acquisitions.

Learn more

Upcoming Plastics News Events

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 15, 2015 - September 17, 2015Plastics Caps & Closures - September 2015

More Events