INGOLSTADT, Germany (Reuters) - Volkswagen's premium Audi brand is weighing whether to pass on the costs of U.S. import tariffs to customers via price increases, it said on Tuesday, adding it was expecting a decision this year on localising production in North America.

Audi has no factory in the United States but is one of the carmakers most exposed to U.S. import tariffs via its plant in San Jose Chiapa, Mexico, which makes the popular Q5 and employs over 5,000 people.

U.S. President Donald Trump earlier this month agreed to exempt automakers for a month from his punishing 25% tariffs on Canada and Mexico so long as they complied with existing free trade rules.

Audi's finance chief Juergen Rittersberger said the company was considering "the extent to which we will have to pass on at least some of the tariffs to our customers in the form of price increases".

Audi CEO Gernot Doellner expects a decision on localising production in the North American market -- which could include using existing plants of the Volkswagen group or a new plant -- this year.