Oct. 1 (Bloomberg) -- The U.S. needs to address rising debt and reduce political discord if it wants further investment from foreign companies such as Volkswagen AG, the top U.S. executive for Europe’s biggest carmaker said.
“This country needs to get its house in order,” Jonathan Browning, Volkswagen’s U.S. chief executive officer, said today in a speech at the Brookings Institution in Washington. “It needs to restore global confidence in the workings of its political system.”
Browning cited the decision to select Mexico as the location for the first North American plant for Audi, the company’s luxury brand, as an example of the U.S. losing to increasing global competition for foreign direct investment. It doesn’t make sense for an auto company to build a plant in the U.S. if it plans to export vehicles made there, he said.
About 70 percent of the Q5 midsize sport-utility vehicles that will be produced at the plant will be for export from Mexico, Browning said.
“That was one of the key drivers in terms of that decision,” Browning said in an interview after his speech.
The U.S. should pay more attention to India and China, where Volkswagen has 12 production plants and plans at least three more, Browning said. Volkswagen, based in Wolfsburg, Germany, has its U.S. headquarters in Herndon, Virginia.
Foreign companies employ about 21 million U.S. workers representing 12 percent of the nation’s total employment, according to the Organization for International Investment. Volkswagen employs about 5,800 people in the U.S., according to a company fact sheet.
September sales, which close today, will be “reasonably strong,” Browning said in the interview.
“The momentum appears to be continuing as it’s been in the last few months,” he said.
Volkswagen, which is targeting more than 500,000 vehicle sales in the U.S. this year, may have increased combined deliveries of its Volkswagen and Audi brands by 30 percent in September, the average of four analysts’ estimates. VW is offering no-interest loans on the Tiguan and Touareg SUVs, as well as the Passat, Jetta and Golf cars, auto researcher Edmunds.com said.
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