TORONTO – Volkswagen AG believes it will need a second assembly plant in North America within the next few years and Ontario says it will compete for that investment.

“We’ll be in the game,” said Economic Development and Trade Minister Sandra Pupatello on Monday after weekend reports that the Germany-based auto giant is considering a plant for its luxury Audi brand.

Audi chief executive Rupert Stadler told Automotive News that the division needs new production capacity because it can’t keep up with demand and it will make a decision by May next year.

He also revealed Audi is considering engine and transmission plants as the company pursues an aggressive international growth plan.

Pupatello, who is not running for re-election this fall, would not comment on any progress in luring a sixth automaker to Ontario, North America's biggest jurisdiction for vehicle production. General Motors, Ford, Chrysler, Toyota and Honda already build cars and trucks here.

Audi has started to run into inventory problems in North America during the last year and is having difficulty keeping up with North American demand from dealers.

In Canada, Audi’s sales have shot up 18.8 per cent to 8,819 vehicles in the first half of the year from the same period in 2010.

Volkswagen’s sales have also jumped in the last year. In the first half, business soared 17.7 per cent to 26,942 vehicles.