Audi to build plant in Mexico

Detroit Free Press - Audi, Volkswagen's luxury brand, will build its first North American plant in San Jose Chiapa, Mexico, to bolster its challenge to BMW.

Construction on the new factory is to start next year, with car production to begin in 2016, the Ingolstadt, Germany-based company said Tuesday in an e-mailed statement. Audi plans to assemble the Q5 SUV at the factory, which will be able to produce 150,000 cars a year.

Audi will join German competitors BMW and Daimler's Mercedes-Benz in making SUVs in North America for delivery worldwide. Audi sells about half as many cars in the U.S. as BMW and Mercedes and has a target of increasing deliveries in the country by 59% from last year to 200,000 vehicles by 2018.

San Jose Chiapa is about 37 miles east of Puebla, where VW assembles the Jetta and Beetle. The VW plant was founded in 1964.