German luxury carmaker Audi is planning to invest about $2bn to build a new manufacturing plant for sport utility vehicles in Mexico.
The Mexican plant, which is expected to start operaton in 2016, will initially have capacity for manufacturing 150,000 Q5 SUVs per year.
AUDI Board of Management chairman Rupert Stadler said Mexico is one of the world's top ten automotive locations and offers a blend of tradition and experience.
"Good infrastructure, competitive cost structures and existing free trade agreements played a significant role in the choice of Mexico," Stadler said.
Audi said that the exact location for the Mexican plant will be chosen later this year.
AUDI AG Production Board of Management member Frank Dreves said, "The new plant will become a fully fledged member of the Audi production network and will implement the very latest standards in terms of resource efficiency and production processes."
With the launch of operations of the Mexico plant, the carmaker claims that it is moving close to its sales target of about two million units per year by 2020.
Volkswagen, the owner of Audi, is also constructing a $500m engine plant in Guanajuato, which will have a capacity to produce 300,000 engines per year, and will be supplied to both of its plants in Puebla and in Chattanooga.
