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Contracts on VW and Skoda Assembly Plant in Russia Signed


June 2006
 Filed under: SKODA Car News | SKODA Headlines
5/29/2006 -- Volkswagen Group BOD Chairman Bernd Pischetsrieder and Škoda Auto BOD Chairman Detlef Wittig signed an assembly plant construction contract with the Russian Federation and the Kaluga District in Moscow on Monday. The new plant is to be built in Kaluga, a city about 160 km southwest of Moscow. Minister German Gref and Kaluga Governor Anatolij Artamonov signed the contracts on behalf of the Russian government and the Kaluga District, respectively.
“The reason for building the new plant is that we wish to make better use of the growth opportunities offered by the Russian market and strengthen the position of the Škoda brand in Russia,” said Detlef Wittig in Moscow. As the customs duty on imported vehicles is 25%, offering Škoda at competitive prices in Russia is only possible if the cars are also produced in Russia.

“As the duty on the assembly components to be imported will drop to only about 3%, we will be able to offer more competitive prices and, as a result, increase the sales volume in Russia. At the same time, we will be able to increase the output figures in our manufacturing plants in the Czech Republic and offer enough jobs there,” said Škoda Auto BOD Chairman. Kaluga is situated in the centre of the European part of the Russian Federation, about 160 kilometres southwest of Moscow. The city has over 330,000 inhabitants and is an important centre of research and industry. It is also the seat of the Kaluga District government.

Scheduled to start in the second half of 2007, the initial-stage modus operandi to be set up in Kaluga will be an assembly of semi-knocked-down VW and Škoda vehicles. The first model to be assembled is the Škoda Octavia. Simultaneously, VW Group and Škoda Auto are going to build a complete manufacturing plant including welding, painting and assembly shops the operation of which is planned to start in the first half of 2009.

The objective of the new project is to increase the sales from the current approx. 10,000 to 30,000 a year and later also extend the current Russian assembly portfolio (Octavia models only) with the Fabia and the Superb.

The assembly plant in Russia is part of Škoda Auto's site development and business growth strategies that also include other assembly and manufacturing plants in the Ukraine, Kazakhstan, Bosnia, India and China.


Source: Škoda Auto

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