Audi, Honda Break Ground on New Mexican Plants Clifford Atiyeh - MSN Exhaust Notes
go to original May 6, 2013

Audi and Honda, eying resurgent car sales and higher profits for its popular models, are starting construction on two new plants in Mexico.

After years of opening plants in the United States, many foreign automakers are rushing back to Mexico to take advantage of the country's lower labor costs and more favorable trade relations with Latin America and other export markets.

In the next five years, Mexican car production is expected to rise by 18 percent, a greater increase than the U.S. or Canada, and may fuel a manufacturing surge in North America not seen since 2000, when a little over 17 million cars were made.

Starting in mid-2016, Audi said, its $1.2 billion plant in Puebla state will build the next-generation Q5 crossover. The first and only Mexican plant for Volkswagen, the oldest of all foreign automakers in North America and Audi's parent company, has been running since 1964. It currently builds the Jetta and Beetle, and had built the original Beetle until 2003. Audi expects to build up to 150,000 cars a year, which means that the next-generation A4 - on which the Q5 is based - will probably be built here, too.

To celebrate, Audi gave state police a Q5 patrol car.

Honda's $470 million plant will build continuously variable transmissions for local and U.S. car production starting in the second half of 2015 in Celaya, about two hours northwest of Mexico City. The transmission plant will sit next to a final assembly plant for the next-generation Fit, also under construction, that's set to open in spring 2014. Honda says it wants to build 350,000 transmissions per year and then double that output "in the coming years." Honda has had a plant in Mexico since 1985 and currently builds motorcycles and the CR-V for Latin American markets.

Read the rest at MSN Exhaust Notes

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