AvtoVAZ to invest $500 million in new Kazakhstan plant image

AvtoVAZ, Russia’s largest automaker, has announced plans to build an assembly plant in the former Soviet republic of Kazakhstan, an investment evaluated at around $500 million.

The partner of General Motors and Renault plans to extend its influence in the region of Central Asia, which is expected to grow into one of the world’s largest auto markets over the next five years.

The new plant will be built in cooperation with local company Asia Auto and will build the next generation of Lada cars, as well as two models built on Renault-Nissan global platforms. The facility will be located in the East Kazakhstan region and will have an annual production capacity of 120,000 cars. AvtoVAZ and Asia Auto officials target a localization rate of 70 percent by 2015.

In the first phase of production scheduled for 2015, the plant will reach 90,000 cars a year, with another 30,000 cars a year to be added in the second phase, starting from 2017. Cars that will be produced in Kazakhstan will be sold in the markets of Central Asia, the Caucasus, Siberia and the Far East region of Russia.

Currently, Asia Auto is assembling in Kazakhstan models from Skoda (Octavia, Superb, Yeti), Chevrolet (Captiva, Epica, Lacetti, Cruze, Aveo) and Kia (Sorento, Mohave, Cerato, Sportage).