Audi to open Mexico production plant Audi, the German carmaker, on Wednesday confirmed that it would open its first North American production plant in Mexico as part of a push to gain global market share. The company said the factory would start production in 2016 and produce an SUV model, though it did not say which one. It also said the plant's exact location would probably be decided this year. A company statement gave no mention of the size of the investment. But in an interview with the Financial Times on Wednesday, Bruno Ferrari, Mexico's economy minister, said it would probably be in the order of US$2bn. "It's not just any car," Mr Ferrari told the FT on the sidelines of the World Economic Forum meeting in Mexico's Puerto Vallarta resort. It's prime end ... it shows that Mexico offers the best conditions. Premium car production would mark a big step up for the Mexican car industry, which produced nearly 2.6m vehicles last year and was the eighth-largest worldwide. Carmakers increasingly value Mexico as a site for global export production because of its network of free-trade agreements with the US and Canada, the European Union and several South American countries. In Audi's statement on Wednesday, Rupert Stadler, chairman of the board of management, said that Mexico "offers an excellent economic basis for Audi production operations." He added: "Good infrastructure, competitive cost structures and existing free trade agreements played a significant role in the choice of Mexico." Audi's investment is expected to help boost sales internationally, in particular in North America. Rival German brands BMW and Daimler's Mercedes-Benz, both of which have US plants, outsell it there and globally. BMW builds its X-model sport utility vehicles in Spartanburg, South Carolina. Daimler's Mercedes-Benz makes its M-, GL-, and R-Class SUVs in Tuscaloosa, Alabama, and will build the midsize C-Class for North America there from 2014. But both Audi and its owner Volkswagen, which opened a plant in Chattanooga, Tennessee, last year, have been making up for lost time in the region and seeking to close the sales gap with their rivals. Audi reported record first-quarter sales in the US of 29,470 units, 16 per cent more than a year ago. Audi has vowed to become the world's biggest premium carmaker by 2018. As part of that effort, it had been studying six or seven sites in the US, Mexico and Canada to build its first North American production plant. VW's factory in Puebla, east of Mexico City, makes Beetles, Jettas and Golf Variants (estate wagons) for North America and the global market and is the German carmaker's largest after its home plant in Wolfsburg. VW is also building a $500m engine plant in Guanajuato, north-west of the capital, with capacity to produce 300,000 units a year, which will supply both VW's plants in Puebla and in Chattanooga. Among other mass-market automakers, Nissan is building a $2bn plant in Aguascalientes, which will be its third in the country. Honda and Mazda are both building new car plants in Guanajuato.