Volkswagen Group is leaning toward building a factory in Mexico for its premium Audi brand.
The parent company favors Mexico for the North American assembly plant over a site on the grounds of its U.S. manufacturing complex in Chattanooga, Tenn., a VW insider told Automobilwoche, a sibling publication of Automotive News Europe.
The second-generation Audi Q5 SUV will be built at the new factory, and production is scheduled to start in 2015.
Audi CEO Rupert Stadler has pushed for Mexico, according to Automobilwoche. Some executives at parent Volkswagen Group prefer a U.S. site, the German publication said.
VW's supervisory board is expected to make the final decision when it meets Wednesday.
An Audi spokesman in the United States said: "It's on the table for the board to review, and from that point, it can take a lot of different directions."
The decision must gain approval from the Audi and VW Group supervisory boards, he said. He declined to comment further.
VW officials have said repeatedly that a decision on North American production would be made this summer and publicly have weighed the pros and cons of Mexico and Chattanooga.
The company's U.S. factory in Chattanooga, where it builds the VW Passat, is less than a year old, is near a supply base and has plenty of room for expansion.