Capacity Planning
The 200,000-unit puzzle inside Audi’s Georgia plan
Audi plans to build three SUVs in Georgia that Slovakia makes today, with about half the output earmarked for the US. How those 200,000 annual slots are used matters more to suppliers and German plants than the $4 billion price.
The most useful number in Audi’s Georgia plan is not $4 billion. It is 200,000, and the question of what fills those slots. Audi’s CEO Gernot Döllner has now answered part of it. The plant at the Middle Georgia Mega Site in Macon will build the Q7, Q8 and Q9, three large SUVs that all come from Slovakia today. Construction starts in 2027 and output begins in the early 2030s. AMS covered the wider announcement earlier this week.
“We are planning to bring our biggest and most premium SUVs and produce them here in Macon,” Döllner said at the 24 October announcement. “This is a long-term investment because we believe in the American market.”
The timing of the line-up is neat. The Q9 is Audi’s largest vehicle ever and a new model, and the Q7 was redesigned for the 2027 model year. Georgia’s start of production will probably coincide with the first midcycle updates of those nameplates, so the plant will launch with products at the point where a carmaker typically refreshes content and equipment. The Q5 stays in Mexico and the Q3 stays in Hungary during the first phase. The plant will build combustion and plug-in hybrid vehicles, and it will be exclusively Audi.
Slicing 200,000
Vito Paladino, President of Audi of America, said around 50 per cent of production is allocated to the US. On a full 200,000 that is roughly 100,000 vehicles, or about 60 per cent of the 164,942 Audis sold in the US in 2025. Audi expects some output to be exported, though it has not said where.
The arithmetic is sharper when set against the investment. Around $4 billion over 200,000 units of annual capacity is about $20,000 per unit. Spread over the planned 4,500 jobs, full output equates to about 44 vehicles per job a year, a crude measure, since Audi has not said how those jobs divide between production and support roles.
The South Carolina side deal
Georgia is not Audi’s only planned US build. A US official told Reuters that Audi also plans 25,000 vehicles a year at the $2 billion Scout Motors plant under construction in Blythewood, South Carolina. A Scout spokesperson said late on 24 October that the brand had no announcements to share. Even with those 25,000 added, locally built Audis would equal only about three-quarters of last year’s US volume, and the smaller models would still be imported. Paladino hinted that more is coming.
“We do have some other investments that we look forward to announcing soon about Audi,” Paladino said.
If both plans proceed, Volkswagen Group’s North American manufacturing map changes. It currently runs three light-vehicle assembly plants in the region, Audi and VW factories in Mexico and a VW plant in Tennessee, and Georgia would add a fourth.
Where the tariff money goes
Every Audi sold in the US arrives from Europe or Mexico, which leaves the brand among the carmakers most exposed to duties. Tariffs cost Volkswagen Group $4 billion in 2025, with $1.4 billion of that on Audi, so the new plant’s price tag equals almost three years of Audi’s 2025 bill. The sales backdrop adds urgency. Audi set a US record in 2023, then saw sales fall 16 per cent in 2025 and a further 15 per cent in the third quarter, and Audi’s third-quarter deliveries fell by almost a fifth, as AMS reported. Currency swings played a part in the decision as well.
“It’s a business decision and it is designed for decades,” Döllner said. “We build where our customers are. Our competitors have been doing this for years.”
Döllner said Audi is currently loss-making in the US. “By investing here, we will make our business model more robust,” he said. Audi’s release also says a stronger North American presence should reduce exposure to trade and currency risks, and it casts the plan as growth. “We have much greater ambitions for Audi in America. The United States is one of the world’s most important premium markets, and we have not yet realized our full potential. We are determined to change that — with premium products, a stronger brand and a competitive local production base. This is about building a stronger Audi business in America — not only about building a factory.”
Relief is still a negotiation
The build is only half the equation. In exchange for the factory commitment, Trump and Volkswagen will keep talking about some form of tariff reprieve, a US official involved in the negotiations said. The talks focus on a proportional tariff relief credit for manufacturers that bring concrete commitments of new production, and any change would apply to every carmaker that expands US output. Döllner declined to comment, and it is unclear whether Audi will receive any.
That matters because Volkswagen Group CEO Oliver Blume has said the group, the world’s second-largest carmaker after Toyota, cannot pay high tariffs and fund new capacity without incentives or tax breaks. At a media roundtable at the IAA Mobility show in Munich in September 2025, he said a US investment would add employment, strengthen communities, build new supply chains and support future taxes and exports. “A potential Audi plant in the U.S. would create further conditions for this,” Blume said.
Others are weighing the same sums, as AMS has examined in its look at tariff pressure on North American vehicle production. Toyota Motor said in July it plans $3.6 billion in outlays for a 2.5-million-square-foot truck assembly line in San Antonio, Texas, while moving Tacoma output to the US from Mexico. Honda Motor is weighing a new US plant but may not proceed unless the United States-Mexico-Canada Agreement is extended. BMW shows the upside of local output.
Its Spartanburg plant builds the X3, X5 and X7, and is a key reason BMW has posted three straight years of record US deliveries and seven years as the top-selling luxury brand. Audi’s US dealers, who have long asked for local production and products tailored to American tastes, will welcome the move.
How 70 sites became one
The search began roughly three years ago and covered 70 locations. Döllner said Audi weighed access to energy supplies, proximity to Volkswagen Group’s North American supplier network and a level site that was largely ready to build on. The site is in Peach County.
“Georgia ended up to be the best location,” Döllner said. Audi finalised its agreement with Georgia officials on 24 October, but what the state and local governments pledged in incentives is unclear. Paladino declined to share details. Georgia’s governor, Brian P. Kemp, was more forthcoming about what he sees at stake.
“Georgia has built a reputation as a place where global companies come to shape the future of their industries. Audi’s decision to establish its first American manufacturing plant here is another defining moment in that journey. We are proud to welcome one of the world’s most iconic automotive brands to Georgia. Together, we have an opportunity to create lasting economic prosperity, open new doors for our communities and help shape the next generation of American automotive manufacturing.”
What suppliers should read into it
For suppliers, the allocation question comes down to a calendar. Construction begins in 2027 and the first Georgia-built Audis follow in the early 2030s, which leaves several years for equipment orders and local sourcing. Audi says the roughly 4,500 jobs should open opportunities for suppliers, service providers and training partners in the region.
“Building a new plant from the ground up allows us to rethink manufacturing from day one. We can design highly efficient and flexible production processes, integrate advanced technologies and develop a strong local supplier network. Our ambition is to establish a benchmark for premium manufacturing that strengthens Audi’s global production network,” said Gerd Walker, the AUDI AG board member for Production and Logistics.
The vote that gates everything
None of it is final. The plan still needs approval from Volkswagen Group’s supervisory board, half of which is made up of worker representatives. They have signalled they may seek concessions at a time of difficult labour, wage and investment talks in Germany, where Audi’s Neckarsulm plant is one of those facing possible closure after 2030. Volkswagen’s works council set out its position on 25 October.
“Additional production in new location always has to complement and benefit existing sites in the global production network,” the works council said. “In this respect, there are several open questions yet to be answered internally through relevant committees.”
Döllner called the investment “not a decision against Germany” and put the case in terms of Audi’s engineering base.
“Germany remains the backbone of Audi,” Döllner said. “We develop our cars here. Our technologies are created here. Georgia does not take any task away from us in Germany. We want to make Audi stronger in America and with that, Audi as a whole.”
Manfred Döss, who chairs the supervisory board of AUDI AG, framed the choice in terms of risk. “Audi’s future will not be secured by cost reductions, increased efficiency and outstanding technology alone. We need the courage to invest, to pursue new opportunities and to make decisions that will shape our company for decades to come. This planned investment demonstrates our determination to do exactly that.”
The calendar is short. “Over the next six to eight weeks, we will have internal committees to be involved in this decision, and we are aiming for having the decision made before the end of the year,” Döllner said. Asked about the timing of the announcement itself, he described a project that reached its public moment almost by accident. “It was... a three-year project that, at the end, by coincidence, led to that moment,” Döllner said.
Paladino was clear about where Audi’s own side of the work stands. “On our end, things are firmed up,” Paladino said. “We know where we’re going.” Whether the supervisory board shares that certainty is a question for the next six to eight weeks.
