VW to decide on building Audi cars at U.S. factory

Volkswagen AG, Europe's largest carmaker, plans to decide on whether to build Audi luxury cars at a new U.S. factory before the year is out, according to Peter Schwarzenbauer, the unit's sales chief.

VW will gauge the recovery in the U.S. market before ruling on Audi's production at the plant in Chattanooga, Tennessee, Schwarzenbauer said in an interview. VW now projects U.S. auto- market sales of as many as 11.5 million vehicles this year, "slightly more optimistic" than a few months ago, VW North American unit's chief Stefan Jacoby told reporters yesterday.

While Audi is outperforming BMW and Daimler AG's Mercedes- Benz unit in China and Europe, it's lagging behind in the U.S., the No. 1 market for luxury vehicles, where some drivers still associate the brand with accidents in the 1980s and 1990s. Even as the gap narrowed in 2009, when U.S. sales held up better than at rivals, the total of 82,716 Audis registered was dwarfed by BMW's 241,727 vehicles and Mercedes's 190,604 cars.

"The U.S. hasn't been a cushy turf" for Audi, Schwarzenbauer said in a telephone interview before the Detroit motor show, which begins today. The Ingolstadt, Germany-based unit needs "long-term growth" in the market, he said.

VW, which wants to dethrone Bayerische Motoren Werke AG as the world's largest luxury automaker, has a target of selling 200,000 Audis in the U.S. by 2018, accounting for 20 percent of the 1 million cars VW aims to sell in that market by that year.

Concept Car

Wolfsburg, Germany-based Volkswagen sold about 214,000 cars in the U.S. last year, excluding the Audi brand. VW aims to more than double the figure to 450,000 cars by 2012 to 2013, Jacoby said at VW U.S. headquarters in Herndon, outside Washington D.C.

Audi will unveil an electric concept car in Detroit. The vehicle won't be on the market until 2012. Audi's presentation will include a repeat rollout of the flagship A8 sedan, which made its world debut two months ago. The unit will hold back on presenting its new A1 compact until the Geneva show in March.