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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.


Plant Growth!

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.