Volkswagen plans to choose land to build a EUR100m engine plant in Russia in early 2012, Markus Ozegovic, CEO of Volkswagen Group Rus said.

The company is currently considering land in the Kaluga and Nizhny Novgorod regions, he told Prime News.

Volkswagen could also increase the capacity of its car plant in the Kaluga Region to 200,000 cars from the current 150,000, under an agreement signed with Russia’s Economic Development Ministry, earlier this year, following the introduction of new industry assembly rules.

The automaker opened the plant in Kaluga in November 2007 and started full-cycle production there in October 2009. The plant produces Volkwagen Polo, Tiguan, Touareg, and Multivan cars, as well as Skoda Octavia and Fabia cars.

Meanwhile, GAZ has said it will begin contract assembly of Skoda’s Yeti in Russia on 1 November.