Gaz Group has signed an agreement with Bosal to establish a joint venture at Gorky Automobile Plant, creating emission control systems.

New production of emission control systems including exhaust pipes, mufflers and catalytic converters will start in the fourth quarter of 2011. The two companies will produce components according to Euro-3 standard, and starting from 2012 components will be Euro-4 compliant.

At the initial stage annual manufacturing capacity of emission control systems facility will be 350,000 kits. The company said customers will include Gaz as well as outside customers. The parties are planning that components produced by the joint venture will be also used in foreign vehicles localisation in Russia.

"I am glad to say that Gaz with extensive manufacturing capabilities and competences has become our partner in Russia. Our company has been actively developing in the Russian market for over 10 years," said president and CEO of Bosal, Aad Goudriaan.

President of Gaz Group, Bo Andersson added: "Cooperation with Bosal will make it possible to upgrade manufacturing capacity of Gaz automotive component production facility and to equip our products with modern emission control systems. Implementation of the project will become a successful step in attracting leading international manufacturers to localize hi-tech auto components in Nizhny Novgorod region and to develop the automotive cluster in the region further."