MUNICH, Germany -- Audi will continue to build the TT coupe and roadster in Hungary when the next-generation models are introduced in late 2007.
The decision is good news for the 5,000 workers at Audi's plant in Gyor in western Hungary, where the TT has been built since 1998.
But it is a setback for Audi's factory in Neckarsulm, Germany. The German plant had hoped to win the contract to make up for the loss of the A2 small car, which will be discontinued in 2006.
In 2000, Audi also started building the A3 at Gyor because its Ingolstadt, Germany, plant was at full capacity.
A3 production at Gyor was stopped last year when the first A3 generation was discontinued.
The German press had speculated that TT production would go to Neckarsulm after A2 production ends.
The all-aluminum A2, introduced in 2000, will be axed because it didn't reach Audi's sales targets of 50,000 units annually.
Audi sold only 12,396 A2s in the first half of this year, compared with 15,716 in the year-ago period.
An Audi source said there had been quality problems with TT production in Hungary, but they have been resolved.
In 2003, Gyor produced 32,337 TT models last year.
The plant also built about 1.3 million engines for Audi and other Volkswagen group models.