Bloomberg News - Volkswagen AG said it agreed with OAO GAZ, the Russian automaker controlled by billionaire Oleg Deripaska, to build more than 100,000 cars a year in the country.
Europe's biggest automaker and GAZ will produce VW brand and Skoda vehicles at the Russian manufacturer's Nizhny Novgorod factory, Marcus Osegowitsch, head of VW's Russian operations, said today in an e-mailed statement.
"The cooperation with GAZ gives us a unique opportunity to expand our production capacity in a fast way," Osegowitsch said, adding 2,500 GAZ workers will be involved in the project.
VW, Toyota Motor Corp. and Ford Motor Co. are increasing production in Russia and adding models as the economy expands and government incentives spur purchases. The country's car sales may reach 2.2 million units in 2011, a 16 percent increase from last year, Osegowitsch said on Jan. 25. A stable ruble, improving consumer confidence and more bank lending may boost demand, especially for compact cars and SUVs, he said.
VW's Russian expansion is part of its push to increase global sales to 10 million vehicles as early as 2015 and challenge Toyota as the world's largest carmaker. VW sold 7.14 million vehicles worldwide last year, a gain of 14 percent. The Wolfsburg, Germany-based company forecasts growth of 5 percent in its vehicle sales this year.
Volkswagen enlarged its factory in Kaluga, 106 miles southwest of Moscow, in October 2009 to make as many as 150,000 cars a year from an initial capacity of 63,000. VW will focus on expanding production of the Polo sedan, made specifically for the Russian market, and new models, Osegowitsch said today.
"The cooperation with VW enables GAZ to increase capacity utilization and attract cutting-edge technologies," GAZ Chief Executive Officer Bo Andersson said in the statement.
VW submitted a so-called memorandum of intent on its planned cooperation with GAZ to the Russian government. The final agreement is due to be signed by both carmakers later this year, VW said.
