August 30, 2012

Volkswagen Group builds own engine plant in Russia

The Volkswagen Group is expanding its capacities in Russia. Dr. Martin Winterkorn, Chairman of the Board of Management of Volkswagen Aktiengesellschaft, and Anatoly Artamonov, Governor of the Kaluga province, has signed contracts in Moscow concerning
the construction of an engine plant in Kaluga, Russia. The Volkswagen Group will invest approximately 250-million euros at the new location, where the modern engine generation EA211 will be produced locally as of 2015. The capacity is set at 150,000 engines a year. The engine plant is being built directly next to the Volkswagen vehicle plant in Kaluga.

"Russia is the primary strategic growth market in Europe for the Volkswagen Group. By 2018 we intend to sell a half-a-million vehicles here annually. To this end we will once again be investing approximately one-billion euros in local production and new models," said Dr. Martin Winterkorn, Chairman of the Board of Management of Volkswagen Aktiengesellschaft, on the occasion of the contract being signed. "Our new engine plant shows: The Volkswagen Group remains a powerful engine for the Russian automotive industry and the Russian economy in general." The engine that will be produced in Kaluga in the future is a 1.6-litre petrol engine from the EA 211 series and thus represents the most up to date engine technology in the Volkswagen Group.

Volkswagen is investing approximately 250-million euros in the 30,000m2 new plant in Kaluga. As of 2015, the engine plant will supply engines for the vehicle production of the Volkswagen Group Rus in Kaluga as well as the contract production in the GAZ plant in Nizhny Novgorod. Crankcases, cylinder heads with assembly integrated, crankshafts as well as the complete engine assembly are all part of the planned scope of production.

With the construction of the engine plant, Volkswagen is expanding its industrial commitment in Russia. At the same time, the Group is fulfilling the targets agreed with the Russian government at the end of May 2011 in the ancillary agreement to decree 166. This determines that, as of 2016, at least 30 percent of vehicles produced in Russia will be equipped with engines that were manufactured locally.

Investments by the Volkswagen Group in Russia up to now have totalled approximately one-billion euros. In order to respond to the strong increase in demand on the Russian automotive market in the future, the Group is planning to invest a further one billion euro in Russia for the development of new market-driven products, the further localisation of production as well as the construction of the new engine plant in Kaluga as was agreed.


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