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Audi Signals U.S. Plant in Cards

The U.S. isn’t the only place where Audi is looking to add capacity, with sales expected to grow to a record 1.2 million vehicles worldwide in 2011.

DETROIT – It’s only a question of time before Audi AG launches vehicle production in the U.S., CEO Rupert Stadler indicates here at the North American International Auto Show.

On hand for the world debut of the new A6 sedan, Stadler predicts continued double-digit growth for Audi in the U.S. this year on top of 2010’s record volume of 101,629, and says the auto maker will decide in the “medium term whether to have a plant here.”

Asked to define medium-term, Stadler tells Ward’s a decision is a “priority issue” for the German luxury car maker.

“We’re happy to break through the 100,000 barrier here for sure. This is a very important milestone for us,” he says. “But in the long run, it always has been clear we have to be in the United States with local production. We have met on our agenda, and this is one of the priority issues.”

Audi Group of America Inc. President Johan de Nysschen notes Stadler’s comments on U.S. capacity “are the clearest indication yet it’s just a matter of when.”

Local production would shorten the supply chain and allow the auto maker to react more quickly to the market, as well as help fill the pipeline with vehicles, he says. Audi finished 2010 with just a 23-day inventory of cars in the U.S. – well below what it considers an ideal of 60 days’ supply.

Local production also would boost the market’s confidence in Audi, de Nysschen adds, encouraging dealers to invest in the brand.

Audi will grow global sales to 1.2 million vehicles this year, up from a record 1,090,000 in 2010, Stadler says, with gains coming primarily from the A1, A6, A7 and A8, all which will be fully available this year.

Also boosting results will be the new Q3 cross/utility vehicle joining the lineup in the year’s second half.

Stadler says the U.S. isn’t the only spot where Audi is looking to boost production volumes. It already is adding capacity for 120,000 A1 small cars in Brussels and is expanding vehicle output in Hungary to produce an A3 derivative.

“The new Q3 will be produced in Spain and, of course, we have to look for additional capacity in China,” he says.

The auto maker also is seeking ways to produce more diesel engines.

“The diesel is really asked for, especially here in the United States,” he says. “We are working heavily on this issue.”

The new A6 bowing here is the first in its class to weigh less than its predecessor, Stadler says.

Using a hybrid steel and aluminum construction, it weighs up to 176 lbs. (80 kg) less than the outgoing model, depending on the choice of powertrain. The body alone is 66 lbs. (30 kg) lighter, Audi says.

Along with two gasoline and three turbodiesels in the lineup, the new A6 will offer the same hybrid powertrain as the Q5 and, ultimately, A8.

It combines a 211-hp 2.0L gasoline engine with a 33-kW (45-hp) electric motor. Audi says the A6 can travel at speeds up to 62 mph (100 km/h) and a range of up to two miles (3 km) on electric-only power.

The most powerful gasoline engine to be offered is the 3.0L TFSI that develops 300 hp and 325 lb.-ft. (440 Nm) of torque. The most fuel-efficient is the 2.0L TDI that achieves 48 mpg (4.9 L/100 km), but Audi says the entire lineup offers 19% better fuel-economy than the outgoing car.

De Nysschen says the U.S. will offer only a gasoline version initially, with sales likely to launch in the fourth quarter. A decision on whether to bring the hybrid to the U.S. has not been made. Volume is likely to be limited to about 3,000 units in 2011.

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