Volkswagen Plans to Double Production in Russia

German car maker Volkswagen AG aims to double its car production in Russia over the medium-term to benefit from tax incentives granted by the Russian government for automakers that produce 300 thousand units a year domestically. The company is considering increasing the annual capacity of its Kaluga plant from the current 150,000 to 200,000 cars a year, but alternatively it could set up a new production facility with a capacity of 150,000. In February Volkswagen signed an agreement with Russia’s GAZ to produce more than 100,000 VW and Skoda cars annually at its Nizhny Novgorod plant.
Sales of VW brand vehicles in Russia increased 40% last year. About 75% of the 130 thousand units the company sold in the local market on 2010 rolled off the line in Kaluga.