The two automakers said they would build over 100,000 Volkswagen and Skoda cars a year at GAZ’s plant.
According to Reuters, Volkswagen also said it had submitted a memorandum of intent to the Russian government confirming its commitment to new manufacturing criteria, a move that could qualify the firm for a raft of incentives including lower customs tariffs on imported parts.
“The Volkswagen Group is highly interested in further developing its operations for the promising Russian market … GAZ Group (is) a strong Russian partner … familiar with western production and management standards,” Volkswagen’s Russia chief Marcus Osegowitsch said in a statement.
Recent Russian government measures gave foreign carmakers until 28 February to submit a memorandum of intent to the government stating their plans for Russian manufacturing. Ford and General Motors are among the companies finalising plans.
Volkswagen also has its own plant in Russia which last year began switching from SKD to CKD kit assembly, raising the amount of labour and parts sourced in the country to comply with stricter regulations.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData