HAMBURG: Volkswagen's luxury car unit Audi plans to invest less than $2 billion in a new plant for sport utility vehicles in Mexico, Audi Chief Executive Rupert Stadler said on Thursday, without providing a figure.
"We are talking about 150,000 units, that does not require $2 billion," Stadler said.
Audi had revealed plans on Wednesday to build the factory to take advantage of low labour costs in Mexico and an exemption from import duties in some regions to help it reach its target of selling 1 million cars in the United States by 2018.
Mexico's Economy Minister Bruno Ferrari had said the investment would be worth some $2 billion, but added the timeframe for the investment and the number of jobs it would create were unclear.
Audi plans to build the Q5 sports utility vehicle (SUV) for global distribution exclusively at the plant. Capacity might increase beyond 150,000 over time as the company might also build another version of the Q5 at the factory, Stadler said.
"We will have additional demand for production which we cannot cover from Ingolstadt and Neckarsulm from 2015, 2016," Stadler said, referring to Audi's two main factories in Germany.
He said no jobs would be lost in Ingolstadt due to the shift of Q5 production to Mexico.
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