Audi Q3 and A3 to begin local production by 2015 in Brazil: India awaits
German automakers Audi have announced that production operations in Brazil will be resumed after a gap of over a decade. Production will commence once again at the Audi Plant in San Jose dos Pinhais from 2015, with the Audi A3 sedan and Q3 Crossover. Meanwhile, similar plans for India are currently under talks. For now India awaits the launch of A3, which was recently spied while on test in Mumbai.
Over €150 million ($200 million) is being invested into the construction of this plant in Brazil. Besides the new Brazilian plant, a new Audi automobile production plant is being opened in Mexico as part of the company preparation to expand operations worldwide and in particular into the South American continent. The company will be expanding their dealer network in the region in their bid to be leaders in Brazil in the premium segment.
Brazil is an attractive market for luxury automobile manufacturers. BMW has also announced plans on setting up a production facility in Brazil which will commence production from 2014 while Mercedes Benz has also planned to produce their next generation C Class from Brazil starting 2015. Besides expansion into Brazil, Audi’s expansion operations also include China where the second Audi plant is set for inauguration in Foshan, later this year.
Earlier this year, ET had reported that Audi is working towards manufacturing the A3 and Q3 in India. Just like this development in Brazil, manufacturing A3 and Q3 in India will also have immense potential. It is financially not viable to produce a car in India for luxury car makers like Audi, BMW and Mercedes Benz, due to very low sales (approximately 33,000 units per year, combined).
But, if a company can make India as their manufacturing (and export) hub for a specific model, this can work in their favor as they will generate more sales. For eg, the new A3 sedan, which is built on the VW MQB platform, can become the first Audi car to be manufactured in India. The reason being, VW’s MQB platform is also going to feature on the next gen Skoda Rapid, Octavia and VW Vento for India. This makes manufacturing Audi A3 in India, financially possible.
Only time will tell if India becomes a manufacturing hub for Audi, just like Brazil, or not. As of now, buyers in India await the launch of new A3 sedan. Audi India has begun testing of this compact sedan and it is usually spotted in Mumbai. Here is one such image (credit Team-BHP) while it was out on test.
Audi to produce in Brazil as of 2015
- Audi A3 Sedan and Q3 to drive off the assembly line in São José dos Pinhais
- CEO Rupert Stadler: “By producing in Brazil, we will create the basis for further growth.”
- Audi to invest around € 150 Mio. until 2015
AUDI AG is creating additional capacity for the next stage of the company’s growth. As of 2015, the Ingolstadt-based automobile manufacturer will produce cars in São José dos Pinhais, Brazil. The new Audi Q3 and the new A3 Sedan are to drive off the assembly line in the south of the world’s sixth-largest economy. For this purpose, the company will invest around € 150 Mio. Audi is thus consistently pursuing its course of international expansion. Already in late 2013, Audi will further expand its worldwide production network when the second Audi plant in China starts production in Foshan. The company plans to produce cars also in Mexico as of 2016. Together with the new production in Brazil, Audi intends to significantly increase its deliveries of the brand with the four rings to customers also on the South American continent.
Rupert Stadler, Chairman of the Board of Management of AUDI AG, and Dr. Bernd Martens, Member of the Board of Management for Procurement, met members of the Brazilian government today on the occasion of announcing the new Audi production site. At that meeting, Stadler named the main reason for the decision: “By producing in Brazil, we will create the basis for further growth in the region.” Stadler also announced that the Sales Department would more than double the size of the dealer network by the end of the decade: “Also in Brazil, our goal is to lead the premium segment.”
Audi is already starting to make preparations to ensure that production begins smoothly in 2015. With production in Brazil, local sourcing should also have a positive impact on the carmaker’s business, explained Audi’s Board of Management Member for Procurement, Dr. Bernd Martens: “For the production of the A3 Sedan, we want to purchase a lot of components locally; we therefore plan to establish close relationships with Brazilian suppliers at an early stage.
By 2015, the company intends to invest around € 150 Mio. to prepare for production at the site in São José dos Pinhais in the federal state of Paraná. As a first step, Audi will produce the new A3 Sedan here starting in 2015. A few months later, the Audi Q3 will also drive off the assembly line in Brazil.
As of 2020, Audi plans to deliver two million cars to its customers worldwide each year. To achieve that target, the company is making large investments at its large production sites in Germany and Hungary. At the same time, Audi is significantly expanding its production network outside Europe. “With today’s decision in favor of Brazil, we are ideally positioned in all BRIC countries,” summarized Audi CEO Stadler. In late 2013, the company will open its second plant in China in Foshan. And by 2016, Audi will also put a new automobile plant into operation in Mexico. With the new plants in Brazil and Mexico, Audi is consistently preparing for further growth worldwide and in particular on the South American continent.