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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.

Volkswagen scores dominant 1-2-3 finish at Monte Carlo Rally

Racing calendars change from year to year, but most series have that one race they just couldn't do without: the Monaco Grand Prix for F1, Le Mans for endurance racing, Dakar for rally raid, the Indianapolis 500 for Indy, the Daytona 500 for NASCAR... and for the World Rally Championship, it's the Monte Carlo Rally. Winning the Monte brings with it its own measure of bragging rights, but locking out the podium is another story altogether. And that's just what Volkswagen did this weekend on the Cote d'Azur. The hard-fought season-opener saw nine-time world champion (and seven-time Monte Carlo Rally winner) Sebastien Loeb return with Citroen, but ultimately it was the VW team that won – and won big, taking a commanding 1-2-3 finish. Sebastien Ogier (with Julien Ingrassia) finished first, followed by Jari-Matti Latvala (with Miika Anttila) in second and Andreas Mikkelsen (with Ola Floene) in third, all of them in the Volkswagen Polo R WRC that was just updated in time for the start of the season. The rally passed right through the Forest Saint Julien where Ogier was born, and at the end of it all, Mikkelsen walked little more than 50 steps from the Volkswagen garage to his condo at Quai Antoine 1er in Monte Carlo. It was only the second time VW has locked out the podium since hitting the scene two years ago, following the German team's 1-2-3 finish in Australia last season en route to its second consecutive world championship. This also marked the second year in a row that Ogier and VW have won the Monte, after narrowly losing out to Loeb in '03. The achievement in Monaco this weekend made VW only the fifth manufacturer to take the top three spots in the Monegasque capital: Renault-Alpine became the first in 1973, followed by Lancia (with the Stratos) in '76 and then again (with the Delta Integrale) in '89, Audi sandwiched between in '84 and Citroen with the "dream team" of Loeb, Colin McRae and Carlos Sainz in 2003. (Peugeot achieved the same in 2009, but that was when the Monte Carlo Rally had left the WRC and was run as part of the less prominent and lower-spec Intercontinental Rally Challenge.) Not even Subaru, Mitsubishi, Toyota or Ford - all dominant forces in their time - can claim that feat. The victory secures the Polo R WRC's place as the most dominant car in the championship, winning over 85 percent of the rallies in which it has been entered since its debut in 2003. FIA World Rally Championship (WRC), Rally Monte Carlo One-two-three!

VW planning 20 new plug-in models for China

With just about everything getting super-sized for China, Volkswagen is following suit with its plug-in vehicle plans for the world's most populous country. VW, Europe's largest carmaker, is looking to sell more than 20 different plug-in models in China within the next four years, Reuters says, citing comments Volkswagen Group China head Jochem Heizmann made in Shanghai. The company is hoping that translates to sales of more than 100,000 plug-ins in China by the end of the decade. Go big or go home, right? There's a huge plug-in vehicle opportunity in China, especially given the bad pollution situation in cities like Beijing and Shanghai and the Chinese government's incentives for plug-in vehicle buyers. Volkswagen CEO Martin Winterkorn said at the Beijing Motor Show this spring that the company would spend $25 billion on at least a half-dozen plug-in models for China by 2018. VW will start selling the e-Golf in China this year and the Golf GTE plug-in hybrid in 2015. VW said in August that it would start selling the e-Golf in the US for about $35,500 in November. That's a $6,500 price hike from the base Nissan Leaf.