Continental is to spend over EUR6m (US$8.6m) expanding its Russian factoryy in Kaluga to produce engine control units as well as components for use in fuel supply and injection systems.

Kaluga is home to a PSA Citroen, Mitsubishi and Peugeot assembly plant as well as Volkswagen and Volvo factories.

It said in a statement that it aims to be the leading international supplier of electronics in this vehicle market.

Russia is one of the world’s fastest-growing car markets. The government and regional authorities are using tax incentives to encourage foreign vehicle manufacturers and suppliers to ramp up local production.

Continental’s local unit, which operates under the name AVTEL, is being renamed Continental Automotive Systems RUS. The company plans to expand annual production capacity to at least 1m engine control units in Kaluga, creating over 120 jobs.