Presentation - subject to modification during presentation -

Rupert Stadler, Chairman of the Board of Management of AUDI AG

San José Chiapa, 2013-04-20

Speech Laying of the foundation stone for the Audi production site Mexico

Rupert Stadler, Chairman of the Board of Management of AUDI AG

Economics Minister, Governor, Ambassador, Media representatives from Mexico, the United States and Germany, Ladies and Gentlemen, I am delighted to welcome all of you!

A very special welcome to the Mayor of San José Chiapa, here in the marquee, and to the many citizens, who have gathered in the town square, to follow a live transmission of this ceremony. Thank you for your interest! 

Mobility is a dream of mankind. Thanks to mobility we discover new horizons, overcome boundaries, get to know other cultures, and exchange ideas all around the globe.

Shaping individual mobility, that is our mission. Like no other brand, Audi stands for Vorsprung durch Technik. We are convinced: If you stand still, you get left behind.

That’s why we are rapidly pushing ahead: with our innovations, with our activities for the city of the future and with our global footprint.

Audi pursues a strategy of worldwide growth. That’s why we are here today.

Today, we are laying the foundation stone for the thirteenth production site  of the Audi Group worldwide. Mexico was chosen very deliberately. In strategic terms, this country is the linchpin, in the middle between North and South America.

With more than forty free-trade agreements, this country is an ideal export base.

What’s more: We have decided to supply the world market from here with our successful model Audi Q5. That’s a volume of approximately 150,000 cars each year. This marquee has been set up on a spot with symbolic power:  We are now located in “grid square Q5” of our construction site.  As if the place had been named after the future star of this new plant! After the Audi Q5, which will drive off the assembly lines here in 3 years! After the world champion in its segment of premium SUVs; And premium SUVs are becoming more and more popular. Worldwide, every third Audi will be an SUV by 2020. The new Audi plant in Mexico will make a major contribution to that.

The part of the site in grid square Q5 is four meters higher than the rest. The fundament has already been created, upon which exactly here, the press shop and the body shop will be located. We are building a complete automobile production plant, including paint shop and assembly.

In September 2012, we decided to buy this land with some 400 hectares. It’s about as big as 400 soccer fields. One tenth of it will be built on. The 3D animation of the factory’s layout shows: Each machine here will have the same position as all over the world, thanks to our modular production toolbox. Our Audi Production System ensures that our customers all over the world can rely on the seal of quality “made by Audi.” We can expand the area without any problems. Existing railway connections allow train transport from the factory. There will be access roads to two major highways. And in other respects as well, the area has a good infrastructure. All of these facts were good reasons to come to San José Chiapa.

Laying the foundation stone for this plant gives us cause to think about the foundation of our own success. The roots of AUDI AG are in the south of Germany, in the two car cities Ingolstadt and Neckarsulm. The success story of the past decades can be fully ascribed to our motivated employees at our main plants in Germany. With highly qualified skilled workers in Germany, Hungary, Belgium, Spain, China and Mexico, we want to extend our success.

Inside the foundation stone, we will deposit for posterity today’s issue of the local newspapers from our home country, as well as the El Sol de Puebla. And as a snap shot of our corporate history, We will also add the current annual report of AUDI AG.  That report states that we shipped more than 1.45 million cars in 2012. It states that we have doubled our market performance in the past ten years. And that we are also financially successful. And when one day, archeologists search for traces  of the twenty-first century on this site, they will find all of this information not only on paper, but also on digital data carriers. A tribute to our networked world of today!

Mexico is an automobile production site with tradition. Many international manufacturers have facilities here. This means that some suppliers have already become established here. Along with Audi, several more partners will be added.

Today, more than 100 board members of supply companies are our guests – from Europe and the United States. They want to set up facilities close to our site here.

Yesterday, they attended a suppliers’ information day with us. And this morning, they took part in an off-road drive in 70 Audi Q5s.

We are delighted about the strong spirit of optimism amongst our partners – both locally and internationally. By the end of the year, we will allocate a purchasing volume for the Audi Q5 of 12 billion euros, which is equivalent to more than 15 billion US dollars, or about 190 billion Mexican pesos. There will be a suppliers’ park halfway between San José Chiapa and Puebla City, from where they will be able to quickly supply Volkswagen and Audi.

Mexico is the world’s fourth-largest exporter of automobiles. And the fifth-largest exporter of car parts. Each year, more than three million cars are made in Mexico.

And the number of new car registrations in North America shows the market’s potential: 18 million new cars are expected for 2013. In other words: For a car brand and its suppliers, Mexico is the promised land. Our parent company, Volkswagen, realized this more than fifty years ago. That’s why with our next steps, we are utilizing a great depth of experience. An additional factor is that we will profit from the engine plant in Silao, which Volkswagen just opened this January. Audi’s two-liter TFSI engines are now being produced there.

Today, we are taking the biggest step for the internationalization of our business in the history of our automobile production. All over the world, every 22 seconds nowadays we make a fan of the Audi brand happy with a new car. We want to bring that to the next level: 16 seconds by the end of the decade. Also in North America, we are pursuing a course of enormous growth. In the United States, Canada and Mexico, we grew last year by nearly 20 percent. By the year 2020, we anticipate annual shipments of: 15,000 cars of the Audi brand here in Mexico, at least 30,000 in Canada, more than 200,000 in the United States and a total of more than 300,000 cars in the whole of North America. So by 2020, every seventh Audi from our worldwide production will be sold in the northern half of this continent. And then we will have achieved our target and strengthened America as the third pillar of our unit sales alongside Asia and Europe.

In Mexico, we are investing more than 900 million euros, equaling to 14.5 billion Mexican Pesos. We are making this investment exactly here, because we have experienced excellent cooperation with politicians and the public authorities:

At the federal level in Mexico City, at the state level in Puebla, and at the local level with San Jose Chiapa. This makes us confident that the construction of this plant and the ramping up of our production will run smoothly.

We have committed to creating at least two thirds of the value added of the Audi Q5 here in Mexico. And the Governor of the State of Puebla, Rafael Moreno Valle Rosas, has already announced: He wants to drive the first Q5 that we build here as his official car!

Due to Puebla’s business-friendly policy, we decided to create 3,800 jobs here. Audi is an attractive employer the world over. In the past ten years, we have created 15,000 new jobs. I have good news for anyone in Mexico who wants to work for us: We will be advertising the jobs available here in the third quarter. And that’s not all: As a rule, the 1 to 5 formula can be applied to the employment effects of a car plant on a region.

For each job at Audi, another five jobs will be created in our vicinity – at suppliers and in the rest of the economy. In total, we expect up to 20,000 direct and indirect jobs to be created as a result of our new plant in the next ten years. Before the end of this year, we expect the first colleagues from Mexico to come to our sites in Germany for training. Ingolstadt by the way is having an especially close look at San José Chiapa, because our main plant is taking over the mentorship for this factory.

We know that our presence in San José Chiapa will change a lot. We are prepared to assume responsibility in this community, and to be involved in cultural, social and environmental matters. We will behave as a good corporate citizen here, as part of the community, just like we do at all the other Audi sites.

The gates to the Q5 factory will always be open. After production has started, we will also offer plant tours for everyone who is interested. We are already looking forward to intensive interaction with our neighbors.

Audi has set itself the goal of continuing to design and produce the most innovative cars in the world – cars which meet our challenges. Individual mobility only has its place in the society of tomorrow if it is sustainable. We are passionate about achieving this goal. Because we want our children to lead fulfilled lives as well.

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