Dow Jones Newswires (Frankfurt) - Volkswagen AG (VOW.XE) and GAZ (GAZA.RS) on Monday signed an agreement to assemble 110,000 VW and Skoda vehicles per year at the Russian auto maker's plant in Nizhny Novgorod from end-2012 on.
"The quick expansion of production capacity in cooperation with GAZ will significantly strengthen the Volkswagen Group's position on this key market," Volkswagen Chief Executive Martin Winterkorn said in a statement.
"Apart from the contract manufacturing ... at GAZ, we will also be expanding capacity at our plant in Kaluga," Volkswagen's General Representative Detlef Wittig said.
MAIN FACTS:
- The planned production volume in Nizhny Novgorod is 110,000 vehicles per year.
- Investment at the plant will amount to some EUR200 million. This covers expanding and modernizing existing paint shop and assembly facilities as well as setting up a new body shop.
- The collaboration with GAZ is based on an additional agreement to Decree 166 relating to customs duties benefits, which was concluded by the Russian government in May.
- In February, Volkswagen and GAZ had already signed a memorandum of understanding for a contract manufacturing.
- The cooperation agreement runs until 2019.
