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Volvo Trucks to Build Russian Plant

From Article Codex| May 30,2007

The Swedish company Volvo has recently showed its interest in putting up a plant in the region of Kaluga in Russia.  A group of representatives from the company known for safe cars and trucks has recently visited the region which is said to be a precursor to building an assembly plant in the country.  The company announced that the delegation was sent to the region to study the local business atmosphere.  The company is planning to build trucks at the proposed assembly facility in the area south-west of capital Moscow.  This plant will surely increase the presence of the second largest truck and bus manufacturer in the growing Russian truck market.

About 20 representatives from car parts manufacturers in Sweden visited the said area and they were accompanied by Volvo Vostok Director General Lars Corneliusson.  The visit is the first that the executives have made to the area after Volvo announced that they will be building an assembly plant in the said area.  After studying the local business practices in the area, Volvo is expected to sign an agreement with the Kaluga government before starting the construction of the new assembly plant. 

Following the visit, Nikolai Lyubimov, Kaluga’s minister for economic development, said that the delegation sent by Volvo was pleased with the state that the local businesses are in.  He pointed out that Corneliusson is satisfied by the conditions set by the region.  In fact, it was hinted that Volvo has more plans for the region except the truck assembly facility.  It was reported that Volvo might build a parts manufacturing center in the region which might produce Volvo rotors, suspension assembly and other essential auto parts.  It is also possible that Volvo will put up a repair and maintenance center in the region.  The presence of such facility will greatly help Volvo increase their popularity among Russian truck buyer if they will provide a maintenance and repair center for Volvo trucks. 

Aside from Volvo, other Swedish companies have expressed their interest in putting up businesses in the area after visiting the area and learning the current local business environment.  These companies are manufacturers of auto parts which is a great complement to the truck assembly plant.  Aside from providing jobs to locals, these planned assembly plants will help the country become a major truck market in the near future.  Currently, Volvo has an assembly plant in Zelenograd.  This assembly facility though can only produce 500 vehicles per year and is now working on full capacity.  This production rate is barely enough to meet the demand of the Russian truck market which has been steadily growing for the past years.

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