Volkswagen Considers U.S. Audi Production to Mitigate Impact of New Tariffs
Volkswagen is contemplating relocating part of its Audi production to the United States as a strategic response to the 25% tariff imposed by President Donald Trump on imported automobiles. The German automaker aims to mitigate the financial impact of these tariffs, which have significantly affected European car manufacturers, including Volkswagen.
In an interview with Frankfurter Allgemeine Zeitung, Volkswagen CEO Oliver Blume confirmed that the company is engaged in “constructive discussions” with the U.S. administration regarding the matter. He emphasized Volkswagen’s commitment to remaining a reliable investor and partner for the United States. Blume stated, “For Audi, production in the United States would be in line with our development strategy.”
Despite considering this move for Audi, Blume ruled out the possibility of establishing production for Porsche in the U.S. He explained that the U.S. market, while being the largest for Porsche, produces only around 70,000 units annually, making local production economically unfeasible.
The U.S. tariffs, which target all fully assembled vehicles, have placed European automakers at a disadvantage, particularly those like Volkswagen that rely heavily on imports for their premium brands. Volkswagen’s Chattanooga, Tennessee plant, which produces the ID.4 electric vehicle and two popular SUVs, currently accounts for a small fraction of the company’s U.S. sales.
In response to the tariffs, Volkswagen has already begun holding approximately 37,000 Audi vehicles at U.S. ports, awaiting resolution of the tariff situation. These vehicles, which arrived after April 2, are part of the company’s strategy to manage its U.S. inventory amidst the new trade policies.
As the situation develops, Volkswagen is evaluating its options for U.S.-based production, considering both existing facilities and potential new investments. The company’s decision will be influenced by the evolving trade landscape and its long-term strategy for the North American market.
