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Mexico Levies Penalties on Volkswagen

Automaker failed to obtain environmental certification for vehicles.

by on Feb.18, 2016

Volkswagen was fined by Mexico for failing to obtain proper environmental certifications for its vehicles equipped with diesel engines.

Mexican authorities have cracked down on Volkswagen AG, dishing out nearly $9 million in fines for VW’s failure to obtain the proper environmental certificates for 2016 vehicles equipped with diesel engines.

VW failed to verify emissions standards compliance for almost 46,000 vehicles for the 2016 model year it sold in the country, Mexican officials said.

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The Mexican Attorney General’s Office for Environmental Protection said federal inspectors found that 45,494 Audi, Bentley, Porsche, Seat and VW vehicles for 2016 lacked the environmental compliance certificates required for sale when they visited the automaker’s offices this past December, which was three months after VW admitted it had installed defeat devices on more than 11 million vehicles sold around the world. (more…)

Ford, Toyota to Invest Combined $3.5 Bil in Mexico

Makers join growing list of makers expanding ops South of the Border.

by on Apr.15, 2015

Toyota confirms it will build the next-generation Corolla model at a new plant in Mexico.

Following announcements of major investments in both Mexico and India, Ford Motor Co. is set to make a $2.5 billion bet closer to home. Meanwhile, Toyota Motor Co. has confirmed recent reports that it will invest $1 billion in a new Central Mexican plant to produce its compact Corolla model.

Toyota and Ford will join a growing list of manufacturers either entering or expanding operations in Mexico which is now one of the world’s largest producers of automobiles. That includes carmakers from Europe, Asia and Detroit, as well.

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While Ford is not officially confirming the announcement — stating it “cannot comment on future product or manufacturing plans” – Toyota North American CEO Jim Lentz said the new Corolla plant is part of a “strategic re-thinking of how and where we build our products will create new opportunities for our company, our business partners and our team members across the region.”

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VW Launching New 3-Row Tiguan at Puebla Plant

$1 bil project aimed at filling gap in maker’s SUV line-up.

by on Mar.09, 2015

VW will add about 1 million square feet to its already huge Puebla, Mexico plant for the new Tiguan.

Volkswagen will drop $1 billion into its assembly plant in Puebla, Mexico to produce a new three-row version of the Tiguan sport-utility vehicle.

It’s the latest step in a costly program meant to expand VW’s utility vehicle line-up and increase its competitive position in the U.S. market. The German maker has struggled to rebuild sales even as the overall American market continues to boom, and a lack of utes has been one of its biggest problems, senior officials believe.

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The Puebla plant is already one of Volkswagen’s larger global facilities, handling a range of products including the latest-generation Golf hatchback. And it will now take on the Tiguan when the $1 billion expansion is completed late next year, in time for the start of the 2017 models.

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Booming Sales Put Volkswagen of America Back in the Black

First profit in over a decade.

by on Mar.29, 2013

Workers at the new VW plant in Tennessee have had trouble meeting the growing demand for the American-made Passat.

For the first time since the original Beetle dominated the American import market, Volkswagen of America is moving solidly back into the black.

The German maker’s U.S. sales and marketing arm had steadily lost sales, share – and lots of money – ever since Asian rivals like Toyota and Honda became dominant forces in the market back in the late 1970s. In fact, VW’s decline was so severe that the maker came close to abandoning the U.S. in the early 1990s.

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But, over the last several years, it has picked up significant momentum with a mix of new products, aggressive marketing – and the addition of its first U.S. factory in decades, in Chattanooga, Tennessee.

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VW Moving Golf Production to Mexico

But gen-7 model still won’t reach U.S. shores til 2014.

by on Jan.25, 2013

The seventh-generation, or G7, Volkswagen Golf.

Volkswagen has scored quite a hit with new products like the Passat that have been retuned for the American market. But the maker still retains one frustrating German habit – delaying key product launches in the U.S. until long after they’re already on the road back in the European home market.

So, it seemed like we might be in for some good news when we heard that production of the seventh-generation VW Golf would be shifted from Germany to Mexico.  Unfortunately, we still won’t get the G7 model until sometime during the first half of 2014, still a year late.

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But VW is promising that the shift to the Puebla plant will help it better sync the launch of future generations, as the maker has come closer to doing with the bigger Passat line which is now being produced at the Volkswagen plant that opened in Chattanooga, Tennessee in 2011.

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Audi Opts for New Plant in Mexico

Anticipates cost of less than $2 billion.

by on Apr.19, 2012

Audi Chairman Rupert Stadler introduces one of the maker's new models.

After years of debate, luxury maker Audi has finally won approval from parent Volkswagen AG to build a new North American assembly plant that could help fuel its record growth in the U.S. and other markets.

But the maker of products like the A6 and Q7 has decided to locate the facility in Mexico, rather than the United States, it has announced.

“As an established carmaking location, Mexico offers an excellent economic basis for Audi production operations,” said Audi Chairman Rupert Stadler. “Mexico is one of the world’s top ten automotive locations and offers a blend of tradition and experience.”

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Mexico now has significantly more production capacity than its own market needs might justify, industry analyst note, and continues to gain more rapidly.  Nissan recently announced a multi-billion-dollar project near Aguas Calientes, with alliance partner Mercedes-Benz considering a nearby site. And Honda earlier this month broke ground on a new plant in the country that will produce the subcompact Fit, among other models.

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Audi May Get Go for New North American Plant Tomorrow

But maker reportedly leaning toward Mexico v US.

by on Apr.17, 2012

Audi CEO Rupert Stadler, shown here with the etron concept, reportedly wants the new plant in Mexico.

The long-delayed decision on whether to build an Audi plant on this side of the Atlantic could be resolved as early as tomorrow, insiders suggesting that parent Volkswagen Group will formally give its approval on Wednesday.

But other reports caution that the new factory is more likely to go into Mexico than the U.S. Mexico has become a hot spot for global automotive manufacturers looking to take advantage of its central location, low manufacturing costs – and the extensive array of automotive free trade agreements Mexico has lined up with countries around the world.

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The parent VW Group is apparently supporting the idea of building the new plant in the States, according to Germany’s Automobilewoche magazine.  But Audi CEO Rupert Stadler has been lobbying for a site in Mexico.

VW recently opened a new factory in Chattanooga, Tennessee and has seen a sharp surge in demand for the Passat model produced there.  That has led to a rapid expansion of capacity in Chattanooga.  VW may prefer to take advantage of the supply and distribution network set up to support that factory.  And it might see an advantage to placing a plant in the U.S. as a way to help spur demand in one of its weaker markets.

While Audi has been setting sales records in the United States, it still lags sharply behind key competitors BMW, Mercedes-Benz and Lexus, even though the VW brand is now one of the top sellers in the global luxury market.

The “Made in USA” label could prove important in boosting sales, Michael Macht, the VW Group’s manufacturing chief, told Automotive News earlier this year.

But there are plenty of reasons why Audi CEO Stadler appears to be favoring Mexico, sources stress.  Indeed, VW has long favored the Spanish-speaking nation where it has been building such models as the Beetle.

The typical Mexican automotive assembly plant’s total labor costs run about $8 an hour, according to industry data.  Quality has proven extremely high.  There is an extensive supplier network and reasonably good distribution system for completed vehicles.

Among other things, Audi might be able to directly tap a new powertrain plant in Silao, Mexico, which will launch production next year and offer capacity of up to 300,000 engines annually.

Meanwhile, Mexico has signed more automotive free trade agreements than any other country except Israel, meaning minimal duties on products exported from the country.  That could be seen as particularly useful to supply Audi’s growing sales in not only the U.S. but emerging markets, like Brazil, Chile and Argentina, in South America.

Audi isn’t the only high-line maker weighing its Mexican options.  Mercedes-Benz recently announced that it will build a second North American plant to supplement the existing facility in Alabama.  While officials only say they are considering several options, insiders have told TheDetroitBureau.com that the German maker is leaning heavily towards a site in Aguas Calientes.

That would put it adjacent to, and perhaps even on the actual campus of, a new Nissan plant announced earlier this year.  Mercedes’ parent, Daimler AG, has been rapidly expanding its partnership with the Euro-Asian Renault-Nissan Alliance. Among other things, that includes providing the MFA small car platform that will be used for a production version of the Infiniti Etherea concept vehicle.

The Daimler plant, if it goes to Aguas Calientes, may produce vehicles for both Mercedes and Nissan.

As for Volkswagen, both the Chattanooga plant and the Audi facility would become critical pieces in the maker’s plan to achieve global dominance by 2018, when its various brands aim to collectively sell at least 10 million vehicles annually.

New VW Engine Plant Confirmed in Mexico

German maker will redevelop an existing site in central Mexico.

by on Sep.22, 2010

The VW expansion given current U.S. sales and Japanese competition appears extremely ambitious.

The Volkswagen Group confirmed this afternoon that it will build a new engine plant in Silao, Mexico as part of its long-term expansion strategy in North America. (See Paul Eisenstein’s New Mexican Engine Plant to Support VW’s Chattanooga Assembly Line )

Beginning in 2013, the new plant in Silao will supply the latest generation of engines to VW vehicle plants in Chattanooga, Tennessee and Puebla, Mexico.

Volkswagen Group has previously said it is planning sales of one million vehicles in the U.S. – including 800,000 VWs – annually by 2018. The core element of this ambitious strategy is vehicles tailored to the demands of U.S. customers, such as the all-new Jetta and the New Midsize Sedan (NMS). Year-to-date VW brand sales are 173,000 units.

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The all-new Jetta is built in Puebla and the NMS will be produced in Chattanooga beginning next year. Both vehicles have a high degree of localization.

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New Mexican Engine Plant to Support VW’s Chattanooga Assembly Line

Part of $4 billion U.S. expansion campaign.

by on Sep.22, 2010

Published reports out of Mexico suggest Volkswagen will build a new engine plant about 250 miles from Mexico City.

Volkswagen is reportedly planning to announce, later today, that it will add a new engine plant in the Mexican state of Guanajuato.  The facility is expected to supply powertrains to the automaker’s new assembly line in Chattanooga, Tennessee, and is part of a $4 billion investment campaign aimed at tripling VW sales in the U.S. by 2018.

The Chattanooga plant is scheduled to begin building an all-new model that VW has said will be critical to its effort to revitalize the American market, which peaked at roughly 600,000 sales a year in the early 1970s but is currently running at less than half that volume.  The ongoing question has been where the engines for that vehicle, codenamed NMS – for New Midsize Sedan — would come from. (See Ken Zino’s Mexican President Visits VW’s Puebla Plant)

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Jochem Heizmann, a member of the automaker’s Executive Council, gave a hint during a trip to Mexico, in July, saying VW planned to invest $1 billion in that country over the coming three years.

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