German Car Scene

Russian VW Plant: Foundation Stone Laid

Posted 29th October, 2006 in Skoda, Volkswagen | Leave a comment

The Minister of Economic Development and Trade of the Russian Federation, German Gref, and the Chairman of the Board of Management of Volkswagen Aktiengesellschaft, Dr. Bernd Pischetsrieder, laid the symbolic foundation stone for Volkswagen’s new Russian plant in Kaluga on Saturday.

It is planned to begin assembling Volkswagen and Skoda brand models as early as next year. The full plant with an annual capacity of 115,000 vehicles is to commence production in 2009. A body shop, paint shop, assembly lines and offices will be built on the approx. 400 hectare site located on the outskirts of the city of Kaluga.

“The automotive market in Russia is one of the world’s most interesting. So far, Group brands have only been represented in Russia through sales companies. However, if we wish to enjoy sustained benefits from the growth forecast for this market, we have to produce in Russia as well,” Pischetsrieder said. He underlined that production in Kaluga would bring as many as 3,500 direct new jobs for Volkswagen in Russia. Further positive labor market effects were expected as component suppliers and other enterprises active at various stages in the automotive value chain located in the region. “Furthermore, numerous components will be delivered from other Group plants in the medium term. That will stabilize jobs at other plants in the Group,” Pischetsrieder added.

The new plant will build vehicles tailored to the needs of Russian customers and suited to local road and climate conditions. “We will be building vehicles to Volkswagen’s global quality standards and deploying advanced machinery and tools as well as highly-skilled manpower,” Pischetsrieder emphasized. He added that the price of the locally-produced model would be in line with prices on the Russian market. Other Volkswagen models would continue to be exported to Russia after the plant had been commissioned, so that the Group would be offering customers a broad range of vehicles. “Experience has shown that the Group’s enhanced local presence also strengthens imports of complete vehicles,” Pischetsrieder said.

Detlef Wittig, Chairman of the Board of Management of Skoda and member of the Board of Management of the Volkswagen brand, drew attention to the market initiative which would be running parallel to construction work in Kaluga: “We will be gradually expanding the network of dealerships and service companies for the Volkswagen and Skoda brands in Russia to keep pace with growing production capacity. Our goal is to offer customers both high-quality vehicles and a service oriented to international standards. Attractive financing packages from our Russian financing subsidiary will round off our customer offering.”

Construction work at the site some 160 kilometers south west of Moscow began as soon as the contracts setting up the Volkswagen plant were signed at the end of May. More than 500 people are currently working at the site round the clock, and over 200 heavy-duty construction vehicles are being deployed. The earthworks alone present a challenge for the construction team. Before the plant is finished, in excess of six million cubic meters of earth will have been moved to level out the site surface.

In the final construction phase, the new plant in Kaluga will have its own railway line to ensure the reliable delivery of parts and components. One section of land has also been earmarked for suppliers wishing to settle on site.

[Source: Volkswagen]