Audi, Volkswagen’s luxury car division, plans to build a factory in Georgia, its first in the United States, President Trump said at a rally in the state on Saturday. A factory in the United States would help Volkswagen and Audi reduce their exposure to Mr. Trump’s 25 percent import tariffs on foreign vehicles and auto parts that have been deadly for sales.
Audi imports all the vehicles it sells in the United States from factories in Europe or Mexico. Volkswagen has a factory in Chattanooga, Tenn., but produces only one model there, the Atlas sport utility vehicle. Other Volkswagen models are imported, in many cases from Mexico.
Audi will invest $4.2 billion in the factory in Macon, which will be able to produce 200,000 vehicles a year, Mr. Audi will begin construction next month, he said. He portrayed the investment as a sign his tariffs, which economists have said are inflationary, for inspiring Audi’s decision.
Audi will produce sport utility vehicles at the site, Gernot Döllner, the head of Audi, said after being called to the stage by Mr. BMW and Mercedes-Benz, Audi’s main rivals, have long had factories in the United States — BMW in South Carolina and Mercedes in Alabama — where they mainly produce sport utility vehicles. But it would be years before an Audi factory in Georgia could begin producing cars.
By promising to invest in a key battleground state, and giving Mr. Trump something to brag about, Volkswagen may be hoping to win concessions from the White House that would lower the tariff burden and help the company revive flagging sales in the United States. Sales of Volkswagen cars in the United States, including the Audi and Porsche brands, slumped almost 10 percent in the third quarter, according to estimates by Cox Automotive.
With a market share of 3.4 percent, Volkswagen is a minor player in the United States even though it is the second-largest carmaker worldwide after Toyota. The German carmaker has been trying for decades to increase its sales in the United States to a level commensurate with its global stature. The United States is particularly attractive because it is one of the few markets where there is no competition from Chinese carmakers.
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