Volkswagen Plans New Audi Plant in Georgia, Handing Trump a Win

(Bloomberg) -- Volkswagen AG will build a new factory for its premium Audi brand in Georgia and expand a facility in South Carolina, Donald Trump will announce Saturday, as the US president looks to notch a political win in the final stretch of the midterm election cycle.

The German automaker is also hopeful the announcement will yield potential relief from tariffs that have severely eroded profits.

Volkswagen will build a new plant in Macon, Georgia, to manufacture the Audi Q7, Q8 and Q9 models, with construction of the greenfield project due to begin soon, according to a US official involved in the talks. The facility will have the capacity to produce 200,000 vehicles per year, the official said.

Volkswagen will also expand its Scout Motors plant under construction in Blythewood, South Carolina, adding 25,000 units per year of capacity for a model yet to be determined, said the official, who spoke on condition of anonymity to detail the plans. Trump is set to tout the Volkswagen announcement Saturday night during a political rally in Perry, Georgia — a short drive from Macon — where he is trying to boost Republican candidates who are either trailing or effectively tied with Democrats in the polls.

In exchange, Trump and the company will remain in talks on some kind of tariff reprieve, though any changes would apply to all manufacturers who expand US production, not just Volkswagen and its brands, the official said. Talks are focused on a potential deal that would give some sort of proportional tariff relief credit to manufacturers that bring concrete commitments of new production to the US, the official said.

It generally takes years to build a new auto assembly plant, meaning production likely won't begin until later this decade. Audi presented the proposal in the last few weeks to Commerce Secretary Howard Lutnick, who relayed it to Trump, the official said.

The White House didn't immediately respond to a request for comment and a spokeswoman for Audi declined to comment.

The new site gives Trump a fresh commitment of investment and jobs in the battleground state, where polls show GOP Senate candidate Mike Collins trailing Democratic incumbent Jon Ossoff — but a governor's race that is essentially a tossup. Trump has been campaigning to drum up support for Republicans to avert broad GOP defeats in the midterm elections next month, with key races in traditionally red states such as Kansas and Texas now considered to be in play for Democrats.