Nemak, an aluminium auto parts producing unit of Mexico’s Alfa conglomerate, based in Monterrey, is building a plant to supply Volkswagen in Russia.

The US$80m factory will supply aluminum heads and blocks for a new “high-tech” engine.

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Initial capacity will be 600,000 units a year and production starts in 2015.

CEO Armando Tamez Martinez Nemak said: “The Russian automotive market represents a great opportunity for our company, given the strong expected increase in domestic car production.

“The Volkswagen Group is one of our most important customers worldwide.”

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Russian legislation requires automakers to increase local content in their vehicles and industry analysts reckon this will lead to a 50% increase in engine production in the country.

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Russia is also expected become the largest automotive market in Europe by 2020, overtaking Germany.

Nemak has 34 plants in 14 countries in North America, South America, Europe and Asia.