U.S. debut for Audi's manufacturing facility: Concerns about potential impact on German facilities emerge
In a significant move, German automaker Audi is reportedly considering building a manufacturing plant in the United States, a decision that could have far-reaching implications for its operations in Germany.
According to the Handelsblatt, Audi is contemplating the construction of a plant at the existing VW site in Chattanooga, Tennessee. This potential move comes as the company aims to grow and become more localized in key markets, with the USA being the third global pillar for Audi AG, alongside Europe and China.
The trend of vehicles being produced where they are sold has been accelerated by Trump's tariff rhetoric, making it more cost-effective for automakers to produce cars closer to their main markets. Audi's decision to consider a US plant aligns with this trend.
However, this potential shift could have significant consequences for Audi's German locations, particularly the Neckarsulm plant, which was closed on February 28, 2025, as part of a restructuring plan. The closure suggests that Audi is consolidating production capacities, possibly relocating some manufacturing closer to key markets to reduce tariff impacts and supply chain risks.
The closure of the Neckarsulm plant also implies potential job losses or reassignments at the German site and workforce adjustments as manufacturing shifts or evolves. Models historically produced in Neckarsulm, such as premium large cars like the Audi A6, might see production relocated or partially shifted to the USA plant if it opens, especially for North American markets, reducing reliance on German imports.
Audi's profit fell by almost 40 percent in the first half of the year, and the company has adjusted its forecast for the current year, with revenue expectations shrinking by 2.5 billion euros to 65 to 70 billion euros. The company aims to save more than one billion euros per year in the medium term.
Despite the Neckarsulm closure, other German plants such as Ingolstadt remain operational for a range of models. This suggests a rebalancing rather than a complete transfer out of Germany. The restructuring may also support Audi’s pivot to electric vehicles and new model lines, using domestic production to speed time to market in key regions like North America.
Building a new US plant from scratch is expected to take more than two years. If a planned production volume in the USA of 150,000 to 200,000 vehicles is assumed, it is not clear whether all growth hopes for Audi in the USA will be fulfilled. The local trade unionist is worried about US President Trump's unpredictable trade policy as a major risk for long-term investments.
There are currently intense discussions about how Audi could finance a billion-dollar factory rebuild in the USA, with speculation that the parent company, Volkswagen, would have to support its subsidiary in this regard. By 2029, around 7,500 non-production jobs are set to be reduced at Audi, including at the Neckarsulm plant, in a socially responsible manner.
Rudolf Luz, the current acting first representative of IG Metall Heilbronn-Neckarsulm, has stated that a new US plant should not come at the expense of German locations. The potential implications and risks for German locations like Neckarsulm are being intensely discussed.
[1] Handelsblatt [2] Autocar Professional [3] Reuters [4] The Drive
- Audi's potential investment in a US manufacturing plant signifies an expansion in the finance sector as the company seeks to secure funds for the construction, likely seeking support from Volkswagen, its parent company.
- The automaker's growing presence in the business landscape, with a focus on key markets like the USA, also impacts the investing sphere, as Audi anticipates saving costs by reducing tariff impacts and supply chain risks, thereby boosting its overall finance productivity.
