Audi has said it will spend $۴bn (£۳bn) to build its first factory in the US, as its parent company, Volkswagen, struggles with the impact of steep tariffs imposed by Donald Trump.
The German brand’s chief executive, Gernot Döllner, joined Trump on stage at a campaign rally on Saturday night to announce the factory in Macon, Georgia, in an unusual move by a big European brand just days before the US midterm elections.
The Republican party under Trump is trying to retain control of both houses of Congress, but it is polling poorly as it struggles with higher fuel prices caused by Trump’s war on Iran, as well as his trade war against some of the US’s biggest trading partners.
Trump has long tried to convince voters that his tariffs are helping to increase the number of manufacturing jobs in the US, and has seized on any new factory investments. However, US vehicle and parts employment has fallen since Trump took office last year.
Audi, Volkswagen’s most important premium brand, has suffered from Trump’s ۱۵% tariffs on imports from the EU as well as the president’s efforts to cut sales of battery electric vehicles in favour of petrol cars.
It said it aims to build ۲۰۰,۰۰۰ SUVs at the new US factory, creating ۴,۵۰۰ jobs. The factory will build the Q۷, Q۸ and Q۹ SUVs, shifting some production from Bratislava in Slovakia.
Volkswagen has said Trump’s tariffs cost it up to €۵bn(£۴.۲bn)a year, before the impact of lower sales. The German manufacturer this month said it was still struggling with “continued high pressure from import tariffs”. The carmaker was also forced to shift some production of its cheapest cars, such as the Jetta saloon and Taos SUV, from Mexico to the US.
The new factory may add to tensions in Germany, where Volkswagen has started to cut as many as ۱۰۰,۰۰۰ jobs and close factories. It has blamed the job losses on intense competition from Chinese carmakers, as well as the tariffs and a need to invest heavily in the shift to EVs for markets other than the US.
Döllner said he accepted the invitation to speak at Trump’s rally out of respect for the US.
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“We are planning to bring our biggest and most premium SUVs, and produce them here in Macon, Georgia,” he said at the event. “This is a long-term investment because we believe in the American market.”
Volkswagen’s chief executive, Oliver Blume, told investors in July that “US tariffs create a significant burden and restrict international trade”.
However, the group has said there is still demand in the US for Audi’s large petrol SUVs, and it is planning its largest-ever SUV, the Q۹, with the American market in mind. Large petrol-powered SUVs have played a big role in global carbon emissions.
