The Financial Times newspaper reports that Volkswagen is in discussion with the Russian government about the conditions under which it could set up a car factory in the country. The newspaper also said that the carmaker is ‘hopeful of a result within two months’.
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The FT report said that Volkswagen is planning a new plant making Volkswagen-brand models from imported kits.
Volkswagen’s heightened interest in the Russian car market reflects its current growth and future potential. Observers note that the Russian economy is now growing and has stabilised after the problems of the 1990s. Volkswagen will also be aware of its competitors’ moves in the country – Ford and GM are both making vehicles in Russia (the latter in a joint venture with the largest producer, AvtoVAZ).
However, the FT also said that Volkswagen has told the Russian government that it will only invest if restrictions limiting imports of parts after three years are lifted.
Detlef Wittig, head of sales for the VW brand, told the FT: “We need to get rid of these regulations. We can only only hope that we will be able to come up with something positive in the next couple of months or so.”
The FT report said that Mr Wittig added that the company wanted to start slowly, with an investment in the double-digit million euros. “We want to have limited financial investment to see whether we could have the quality of work there that shows our cars are accepted in the market,” he told the newspaper.
VW currently sells about 10,000 imported cars a year in Russia.
