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Weekly Recap: Mercedes, Volkswagen spend big as import automakers invest in North America

Import automakers are on a building frenzy in North America as resurgent car sales have prompted companies to expand their manufacturing footprints to meet rising demand. That was evidenced this week when Mercedes-Benz announced plans to build a $500-million factory to produce the Sprinter commercial van, and Volkswagen confirmed a whopping $1-billion investment to expand its massive plant in Mexico. Meanwhile Jaguar Land Rover reportedly wants to build a factory in North America, but not for at least three years, and Hyundai is said to be expanding in the southern United States. The common thread in all of this expansion? Trucks, time and money. Mercedes wants to capitalize on the burgeoning work van segment in the United States and will break ground in 2016 on a 200-acre site in Charleston, SC, to build the next-generation Sprinter. The site will have a paint shop, body shop and an assembly line, and 1,300 people will be employed when production ramps up. Why do this, when Mercedes has immense van operations in Germany? It's cheaper to build in the US for the US market. Building locally allows Mercedes to avoid import taxes, forego a complex shipping process that involves partially disassembling German-built Sprinters and naturally, reduces the time it takes to deliver finished trucks to their buyers. "This plant is key to our future growth in the very dynamic North American van market," Volker Mornhinweg, head of Mercedes-Benz Vans, said in a statement. He was speaking about Mercedes and vans, but another German automotive giant, Volkswagen, had similar motives for its mammoth expansion plans in Puebla, Mexico. The added space and production capacity will allow VW to build a three-row version of the Tiguan, and provide another crossover for its US lineup that's light on SUVs. The current Tiguan has two rows. The factory will be able to churn out 500 units daily of the larger variant, and they will be sold in North and South America. It will arrive in the US in mid-2017, a spokesman told Autoblog. VW also plans to build another crossover, a midsize seven-passenger vehicle, at its growing Chattanooga, TN, site. "Localization has become key to safeguarding our competitive position on the global market, and manufacturing the Tiguan in Mexico will bring production closer to the US market," Michael Horn, CEO of Volkswagen Group of America, said in a statement.

Audi says fixing diesel emission problem is simple

Audi reportedly has a simple repair nearly ready to fix the emissions problem on 85,000 vehicles with the 3.0-liter TDI V6 in the US. "Swift, straightforward and customer-friendly solutions are in discussion," company exec Rupert Stadler told workers in Germany, according to Reuters. In late November, Audi announced that the 3.0 TDI had three previously undisclosed auxiliary emission control devices, including one that was potentially considered a defeat device under US law. At the time, the German automaker claimed it could repair the problem with just a software update. Stadler's statement indicates that just such a simple fix might be on the way. Even before Audi's disclosure of the emission control devices, the Environmental Protection Agency issued a notice of violation against the 3.0-liter TDI for allegedly having software to defeat emissions tests, and the agency later expanded the scope to any vehicle with the engine from 2009 through 2016. The affected models include the Audi A6, A7, A8, Q5, Q7, Volkswagen Touareg, and Porsche Cayenne. New diesel versions of these vehicles have a stop-sale. Audi offered owners of affected vehicles the same $1,000 Goodwill Package that parent company VW offered to its affected diesel owners. The money is split up into a $500 gift card and $500 to spend at the Audi dealer. The package also comes with extended roadside assistance. Audi needs to find a solution quickly because it's under a 45-day deadline from the California Air Resources Board to submit a recall plan for the 15,000 vehicles with the 3.0 TDI in the state. The automaker also must include a report on any effects to fuel economy and performance from the proposed repair. Related Video:

VW bringing fuel cell concept to LA Auto Show

Amid the flurry of hydrogen announcements from Toyota and Honda last night, Volkwagen has something to add: a new hydrogen fuel cell concept vehicle. This will be the first VW hydrogen fuel cell vehicle in many years – remember the Tiguan Hy-Motion back in 2008? – and it comes as a bit of a surprise. First written up by the German publication Wirtschaft Woche, VW is going to have the prototype car (not pictured) available at the ride and drive at the Los Angeles Auto Show later this week. We don't yet know what kind of vehicle will sport the hydrogen powertrain, but our money's on a Golf variant. We'll see soon enough when we get to Los Angeles. What's interesting is that there have been a number of not-so-mixed messages out of the VW executive ranks when it comes to hydrogen vehicles. VW's Japanese president, Shigeru Shoji, said in September that, hydrogen fuel cells, "may fly within Japan, but not globally." Last year, VW's electrification head Rudolf Krebs said that "hydrogen mobility only makes sense if you use green energy." Also last year, VW CEO Martin Winterkorn said it's basically impossible to build hydrogen vehicles at a "reasonable cost." Nonetheless, we're going to see a new VW H2 concept soon. Thoughts?