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 Automotive, United States, Mexico, Canada

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

Optical disc molder OEM getting into micromolding with acquisition of CDA

August 29, 2014 11:24 am ET

Optical disc replicator and molder Optical Experts Manufacturing Inc. of Charlotte, N.C., has expanded its core business and entered new high...    More

Image

Baxter investing $300 million to expand dialyzers production in Alabama

August 29, 2014 12:53 pm ET

Baxter International, Inc. is expanding its Opelika, Ala. manufacturing location to boost production of dialyzers, a key component of hemodialysis...    More

Image

EPA fines RI polymer company

August 29, 2014 1:20 pm ET

A Rhode Island polymer manufacturer has reached a $60,000 settlement with the U.S. Environmental Protection Agency (EPA) for violating federal clean...    More

Image

Updating a travel icon for the professional millennial

August 29, 2014 11:44 am ET

As part of a drive to expand its customer base to include more millennials, Airstream Inc. turned to the Columbus College of Art & Design's...    More

Image

American Starlinger-Sahm begins work on new US headquarters

August 29, 2014 10:18 am ET

American Starlinger-Sahm Inc., which sells equipment for woven plastic bag production, PET recycling equipment, sheet extrusion and laminating lines a...    More

Market Reports

Thermoformed Packaging 2014 Market Review & Outlook – North America

This in-depth report analyzes economic and market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as growth strategies being implemented by thermoformed packaging companies.

Learn more

Pipe, Profile & Tubing Extrusion in North America 2014

U.S. demand for extruded plastics is expected to grow by 3 percent in 2014, with PVC remaining the largest segment.

Plastic pipe will post the strongest gains through 2018, continuing to take market share from competing materials in a range of markets.

Our latest market report provides in-depth analysis of current trends and their financial impact on the pipe, profile and tubing extrusion industry in North America.

Learn more

2014 Injection Molding Industry Report

GROWTH, OPPORTUNITY IN SIGHT FOR INJECTION MOLDERS IN 2014

In the wake of the economic turbulence earlier in this decade, molders today find themselves in much better shape. Molders are gaining a competitive advantage by investing in people, equipment and seeking inroads into new markets on a global scale.

Growth in the injection molding industry is going to be driven by low financing costs and a continued move to reshore some business.

Learn more

Upcoming Plastics News Events

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

More Events