Skoda has started Yeti production at GAZ's plant in Nizhny Novgorod, the second factory building the VW Czech unit's vehicles in Russia.

"CKD production of the Yeti is another milestone for our growth in Russia," said Skoda CEO Winfried Vahland. "Russia is our third-strongest market and our number two in Europe, and we intend to grow further in years to come which is why we are resolutely extending our model offensive in this country and expanding local capacity further."

The Octavia will be made at Nizhny Novgorod from mid-2013.

Nizhny Novgorod is a JV between Volkswagen Group Russia and the GAZ Group. The Yeti is the first model off the line in a plant with body, paint and final assembly shops. Yeti production started with in SKD kits in late 2011, completing cars by installing powertrains in bodies already welded, painted and trimmed in the Czech Republic.

In the first 10 months of 2012, Skoda sold 13,600 Yetis in Russia - twice as many as a year ago (6,000).

"This shows the importance of local production," said Michael Oeljeklaus, Skoda's production and logistics chief.

"In GAZ Group, we have a strong local partner at our side. GAZ is a company with about 80 years of experience in car making, with a profound knowledge of the Russian market and highly skilled staff."

Skoda's other production location in Russia, parent VW's main plant in Kaluga, builds the Octavia and Fabia with production of the Rapid due to be added from early 2014. That plant was converted from SKD to CKD assembly several years ago and complete manufacturing capability, including a press shop, is being added in stages.

Skoda Russia deliveries rose 40% year on year to 80,100 from January through October 2012, a new record.