Russian prime minister Vladimir Putin and Volkswagen chairman Martin Winterkorn today presided over the official start of CKD kit production at the automaker’s Russian assembly plant in Kaluga.
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The plant, part of the VW group’s international expansion strategy in one of the world’s most important long-term growth markets, began SKD production at the end of 2007 but is now moving into welding and painting car bodies as well.
“Russia is set to become one of the world’s leading automotive nations and the Volkswagen Group will be involved in shaping this successful future as a reliable partner. Today, we have well and truly become a Russian automaker,” Winterkorn said in Kaluga.
The plant has already assembled over 100,000 VW and Skoda vehicles from SKD kits.
From 2010, maximum annual capacity using the new body and paint shops and assembly lines will be 150,000 vehicles.
First CKD models off the line were a Volkswagen Tiguan and Škoda Octavia. Three more models due in the next few months are the Skoda Fabia, Volkswagen Passat and a low-cost sedan based on the VW Polo and developed specially for Russia.
Production of the low-cost car is expected to start in late May 2010. The car will be shown for the first time to the general public at the Moscow car show in late August and priced at about RUB440,000.
“Volkswagen is backing sustainable growth on the important Russian auto market. Here, the group with its strong brands and convincing technology now ranks among the top three manufacturer groups in terms of vehicle deliveries. Our highly flexible plant in Kaluga has been a decisive factor in this success,” said group production head Jochem Heizmann.
Since SKD assembly in Kaluga began, the group has more than doubled its market share in Russia under difficult conditions from 3.2% to 6.6%. While the overall market in Russia fell over 50% during the first nine months of this year, group deliveries were off about 20%.
Volkswagen’s Kaluga investment is now about EUR570m. A customs post was opened at the plant in the summer of 2009, making rail transport logistics easier. Total Russian investment is EUR774m so far and VW claims to be the largest foreign investor.
The Kaluga plant employs 1,800 and a further 300 are in the sales company based in Moscow. By the end of 2010, there will be about 3,000 jobs at Kaluga.
