German car manufacturer Audi is reportedly considering the possibility of establishing a new production facility in Canada, according to AutoForecast Solutions senior alternative-propulsion analyst Conrad Layson. The new facility would complement the battery plant that Volkswagen and its battery unit, PowerCo, are building in St. Thomas, Ontario.
Layson noted that establishing a new factory close to the PowerCo site would reduce the distance between the manufacturing of the batteries and the installation of the cells in the vehicles, which is considered a good idea as battery cells do not travel well.
Audi’s CEO, Markus Duesmann, had previously stated in February that the company was considering establishing a new plant in the United States, allowing it to benefit from tax incentives provided through the Inflation Reduction Act. However, the automaker has not revealed further details about the location of the factory. Audi Canada spokesman Cort Nielson stated that “no decision” has been made regarding the location of the new assembly site.
According to Michael Robinet, the executive director of automotive advisory services at S&P Global Mobility, the location of an Audi factory in Ontario would benefit from its close proximity to the PowerCo site. However, it would be removed from many established Volkswagen and Audi suppliers in the southern US and Mexico. Robinet also noted that the availability of skilled labor is an important factor, as vehicle manufacturers are now locating their factories where they can find people.
Michigan could also be a good location for the factory, added Sam Fiorani, the vice-president of global at AFS. However, Ontario has an advantage in terms of skilled labor availability.
While Audi has not confirmed the location of its new assembly site, establishing a new production facility in Canada, specifically Ontario, could be advantageous for the automaker due to its close proximity to the PowerCo battery plant and the availability of skilled labor. However, other options such as Michigan are also being considered. As Michael Robinet pointed out, a key factor in the decision will be finding a location where the company can find the necessary workforce to build its products.
