It's long been long rumored that Audi has been looking at building a North American plant to supplement production out of Europe and lower its production costs relative to competitors that already have a manufacturing presence in North America. Speculation on the location of Audi's future plant is over, as the premium arm of Volkswagen has announced San Jose Chiapa as the future location of its North American assembly plant.

Initial speculation centered on a location near VW's recently-opened Chattanooga, Tenn. plant that produces the Passat, but Audi's designated production site makes sense logistically within the framework of VW's existing operations in Mexico. The plant is approximately 42 miles northeast of VW's plant in Puebla, which produces the Jetta and Beetle for the U.S. and other markets in the Western Hemisphere. The Puebla plant is one of the largest-volume automotive production facilities in North America, with an annual output of more than 500,000 units and a production capacity of 600,000.

Audi announced that the next-generation Q5 SUV will be built at the San Jose Chiapas plant, with production scheduled to begin in 2016. Construction on the new plant is expected to start mid-2013. The San Jose Chiapas plant has a projected annual output of 150,000 units. Additional factors cited weighing in favor of the plant location were proximity to colleges and universities with advanced technology programs, safety and quality of life for employees, and accessibility to health care.

Source: Audi