Volkswagen Group said it will invest $4.2 billion in the U.S. state of Georgia, throwing its weight behind President Donald Trump ahead of the U.S. midterm elections. The investment is the largest single investment in the history of the U.S. auto industry.
Trump announced the plan on the 24th at a midterm campaign rally in Georgia, a battleground state where polls show Republican Senate candidate Mike Collins trailing Democratic incumbent Jon Ossoff.
"Volkswagen Group is investing $4.2 billion in Macon, Georgia, to build a massive plant producing 200,000 Audi vehicles a year," Trump said, adding that full-scale construction would begin next month. According to Bloomberg, the new plant will produce Audi's top-end sport utility vehicles, the Q7, Q8 and Q9. Audi will also expand the Scout Motors plant under construction in Blythewood, South Carolina, to an annual capacity of 25,000 vehicles.
Trump said Audi would not have come to the U.S. without tariffs, stressing that his tariff policy had drawn foreign companies to invest in the country. Audi Chief Executive Gernot Döllner also took the stage, saying the company plans to build its largest and most premium SUVs in Macon, Georgia. He described the project as a long-term investment made because the company has confidence in the U.S. market.
Audi has no plants in the U.S. and imports all of the vehicles it sells there from Europe and Mexico, leaving it heavily exposed to tariffs. The company hopes the announcement will ease that burden. The Audi group, which includes Lamborghini, Bentley and Ducati, took a 1.2 billion euro ($1.38 billion) hit from tariffs last year. Operating profit fell 14% to 3.4 billion euros, and the operating margin slipped to 5.1% from 6.0% a year earlier, a decline of 0.9 percentage point. U.S. sales were also down 16% through September this year.