Audi plans to build its Q9 large SUV at a new factory in Georgia, with production expected to begin around 2030. The decision reflects the growing importance of the US market for German premium carmakers, particularly in the high-priced SUV segment. Although the move is not expected to directly eliminate jobs in Germany, it could affect employment in the longer term if production capacity elsewhere in the group becomes available.

The plans highlight a challenge for manufacturers such as Audi, BMW and Mercedes-Benz: their flagship saloons, including the Audi A8, BMW 7 Series and Mercedes S-Class, are traditionally made in Germany, but demand for this category is weakening. The S-Class’s sales volume was halved between 2015 and 2025, while sales of luxury saloons from other brands have also stagnated. Audi has stopped producing the A8, and has not announced a firm successor.

By contrast, luxury SUVs have seen stronger growth. Mobility Global expects Mercedes to sell around 227,000 combustion-engine and plug-in hybrid GLE and GLS models in 2026—about five and a half times the projected S-Class volume. BMW’s luxury SUV sales are forecast to be ten times those of its combustion-engine 7 Series saloon.

BMW and Mercedes have built SUVs in the United States for decades, opening factories in South Carolina in 1994 and Alabama in 1995. US tariffs on imported pickups and large off-road vehicles were already a factor in those decisions. Local production gave the two companies access to the US market without those import duties, and their SUV sales grew as Audi and Porsche’s models produced in Slovakia and Germany saw comparatively stagnant sales.

Audi had instead relied on producing the Q5 in Mexico, expecting it to benefit from North American trade arrangements. That calculation has not worked out, and market observers say the company still has negotiations to pursue with the Trump administration over how tariffs will apply.

Audi’s Q9 is a 5.30-metre-long, 2.04-metre-wide SUV aimed primarily at American buyers. It will initially be built in Slovakia alongside the Q7, Q8 and Porsche Cayenne. Its starting price in Germany is €108,400. Audi’s planned US factory is therefore a late move into a market where large domestic SUVs, including the Cadillac Escalade and Lincoln Navigator, have long been prominent.

Simon Schnurrer, an automotive partner at Oliver Wyman, says the market for very large SUVs is one of the few remaining segments in which US manufacturers can earn strong profits. Henner Lehne of Mobility Global says building the Q9 locally makes sense because the model is primarily intended for the American market. He also argues that producing it in the US could create opportunities to make a larger Porsche SUV there in the future. Porsche has considered a project known as K1, and sharing production with a technically related Audi model could help utilise a new factory.

The Georgia plant would not directly replace German production: the Q9 and related models are currently planned for Slovakia. However, spare capacity at Bratislava could put pressure on German sites, where average labour costs are around three times higher, according to the report.

Lehne sees potential support for European production in future EU rules that could favour vehicles made in the bloc through tax treatment or emissions accounting. Such measures might encourage Mercedes or BMW to move some SUV production currently carried out only in the US back to Europe. Strong SUV sales could make a split between production locations feasible.

Luxury saloons face a tougher outlook. Their lower and declining sales make it harder to divide production between Germany and the US, while US tariffs on German products add costs and can push prices higher. Producing these cars is also becoming more complex as manufacturers accommodate different market requirements, including demand for V8 engines in the US. Schnurrer says Europe’s luxury-car market is generally weak and argues that German manufacturers need to develop new ways to define premium cars beyond large saloons and SUVs.

Sources: FAZ.