The potential relocation of the Q5 to Tennessee comes amid a 27.5% tariff on cars made in Mexico, which is already putting pressure on local operations.
The German luxury car manufacturer Audi, part of the Volkswagen Group, is “seriously” considering producing vehicles in the United States, according to Europa Press, citing company sources who spoke on condition of anonymity.
The strategy aims to strengthen its presence in North America and respond to the environment of trade tensions and tariff barriers promoted by Donald Trump since his return to the White House.
Currently, the Ingolstadt-based company does not have its own plants in the United States, so it supplies that market primarily through imports from Europe and its factory in Puebla, Mexico.
However, US trade policy imposes a 27.5% tariff on vehicles manufactured in Mexico, reducing the competitiveness of models produced in the country.
Faced with this scenario, the automaker is considering moving part of its production—including its best-selling model, the Audi Q5—to the Volkswagen Group’s plant in Chattanooga, Tennessee. According to sources cited by Europa Press, this facility has “plenty of space” to accommodate the production of the four-ring brand.
Audi contributes approximately 40% of the Volkswagen Group’s profits.
Tariffs are already affecting the competitiveness of cars manufactured in Mexico.
The potential relocation would have direct effects on the Mexican automotive industry. One of the main consequences would be the loss of a key model, since the Audi Q5 is currently produced at the plant located in San José Chiapa. Its relocation would imply a decrease in the volume of exports to the U.S. market.
Furthermore, the 27.5% tariff is already “hurting the Mexican model,” according to sources consulted by Europa Press.
This opens the door for other companies to consider moving their production to the United States to avoid entry costs, in line with trade policies implemented during the Trump administration.
In Mexico, Audi maintains its plant in San José Chiapa, where it produces around 124,500 units annually and employs 5,241 workers, according to data from the Mexican Automotive Industry Association (AMIA).
The future of this operation will depend on how the trade environment in the region evolves. At the moment, there are no official announcements regarding a possible relocation from Puebla to the United States.
Source: Europa Press
