- Porsche and Audi are considering building cars in the US for the first time.
- The move would reduce the brands’ exposure to threatened import tariffs.
- Audi could get a Scout SUV spinoff by 2028, German media reports.
Owning a car built in Germany used to carry cachet thanks to the perception of solid engineering and build quality. But that German heritage could become a millstone if President Trump sticks to his word and applies tariffs to cars imported to the US, which is why Porsche and Audi are reportedly looking at setting up their first production sites on American soil.
Unlike BMW, Mercedes, and VW, Porsche and Audi don’t currently make any cars in the US, despite America being the biggest market (or among the biggest in Audi’s case). Audi builds the Q5 in Mexico, so faces a potential 25 percent tariff, and all of Porsche’s vehicles are built in Europe, whose exports could be hit with a 10 percent levy when arriving in the US.
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Now both companies are looking at the possibility of building vehicles at VW’s existing facility in Chattanooga, German newspaper Handelsblatt reports. The Tennessee site currently makes the Atlas SUV and ID.4 electric SUV, but a huge slump in demand for the EV means there’s plenty of spare capacity. ID.4 sales in America dropped 55 percent last year.
Another option allegedly being considered is for Audi to share production space with VW Group’s new Scout EV at the South Carolina site that’s currently under construction. The story says Audi could get a tough Scout spinoff SUV, currently codenamed “Hardcore,” though it won’t appear until 2028 because Scout is the priority and its first model doesn’t debut until 2027.
The report suggests Porsche won’t relocate existing production, but together with Audi will instead use the US as a base for the production of larger SUVs. We know Porsche is working on a flagship K1 SUV using the VW Group’s new Scalable Systems Platform (SSP) and Audi is sure to get a version of it.
Doing nothing is certainly not an option. Although Porsche North America grew its business last year shifting 76,167 vehicles versus 75,415 in 2023, Audi’s sales slumped 14 percent to just 196,576 (less than half of what BMW managed). And any tariffs could be a problem for both brands and VW, which builds the Jetta and Tiguan in Mexico. Moody’s suggests the VW Group could lose 15 percent of its operating profit just from the threatened 25 percent tariff on imports from south of the border.
