Russia: Vw to increase production image

Vw Ag., Europe largest automaker  could increase the capacities of its plant in Kaluga as the company expects the Russian automobile market to become the largest in Europe.

The German automaker plans to launch the production of a new low-cost car based on the Volkswagen Polo at its assembly plant in Kaluga in central Russia in late 2012, Marcus Osegowitsch, Volkswagen Group Rus chief executive, said on Thursday.

Therewith, Osegowitsch remarked that the final decision was not taken but if it will be the collaboration with “GAZ Group” then the German concern will produce cars in Nizhniy Novgorod on the contract basement, informed AutoNews.Ru.

A month ago, Vw and GAZ Group has entered into an agreement to produce more than 100,000 cars per year in Russia.

Bloomberg News, citing Osegowitsch, said the two OEMs will produce Volkswagen and Skoda branded vehicles at GAZ’s plant in Nizhny Novgorod. Around 2,500 GAZ workers will be involved in this project, he said.

The reports have mentioned that 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

Volkswagen AG plans to increase sales in Russia to about 200,000 vehicles this year