Volkswagen Might Manufacture Audis In The United States

Volkswagen could move some of its Audi production to the United States due to high tariffs imposed by the US administration.

Volkswagen CEO Oliver Blume told the Frankfurter Allgemeine newspaper in an interview that “constructive discussions” are underway with the US administration about manufacturing in the United States. The company wants to do “whatever it takes to remain an investor and a reliable partner for the United States,” Blume said.

“For Audi, US production would align with our development strategy,” Blume said. However, he ruled out the possibility of producing Porsche in the US, even though the US market is the largest for the luxury car brand. Around 70,000 vehicles a year is too small to even consider, Blume said.

Volkswagen is Europe’s largest carmaker and is particularly exposed to rising tariffs. In early April, the company announced that the tariffs had reduced its first-quarter operating profit.

US President Donald Trump last month announced a 25 percent tariff on car imports into the US, a major foreign market for German automakers. Blume did not comment on the financial impact of the tariffs on Volkswagen or whether the company would raise prices in the US as a result.

With Volkswagen’s poor sales in the Chinese market, the US market has become even more important for the company, which sold more than a million vehicles in North America last year, or 12 percent of total sales.

Volkswagen has a manufacturing plant in Tennessee, but 65 percent of Volkswagen cars in the U.S. are made in Europe or Mexico. For Audis and Porsches, that share is 100 percent.

• Also See: German Automaker Audi Suspends Vehicle Exports To The US