Volkswagen Breaks Ground on Russian Engine Plant

VolkswagenVolkswagenGermany, 1938 > present98 models
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has laid the cornerstone at a new €250 million, 30,000m² (7.4 acres) engine factory in Kaluga, Russia that is scheduled to be finished in 2015. The new factory will be able to produce 150,000 units a year when it opens. The first engine produced there will be the EA211 1.6-liter petrol engine. 

The factory will produce the cylinder blocks, cylinder heads and crankshafts and assemble the complete engines. 

“The cornerstones of our success in Russia are our Russian production facilities. The new engine plant at Kaluga will add the highly advanced component technology required by our local production capacities, thus strengthening our position on the Russian market,” said Dr. Macht, head of production at Volkswagen. 

Volkswagen already has a production campus at Kaluga. It builds the TiguanVolkswagen Tiguan Gen.1Germany, 2007 > 2015132 versions
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, PoloVolkswagen Polo Gen.5Germany, 2009 > present247 versions
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, Skoda OctaviaSkoda Octavia (Modern) Gen.2Czech Rep., 2004 > 2012249 versions
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, Skoda YetiSkoda Yeti Gen.1Czech Rep., 2009 > present189 versions
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and Skoda FabiaSkoda Fabia Gen.2Czech Rep., 2007 > present280 versions
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there. 

Part of the reason for this factory is that Russia passed a law stipulating that it would place tariffs on cars that did not have at least 30% Russian-made parts. The law goes into effect in 2016. With this new factory, Volkswagen will just sneak into the 30% limit for the models built there. 

The next step for Volkswagen is to build a logistics center in Moscow. 

Russia is Volkswagen Group's sixth-largest country for sales worldwide just behind Great Britain. It has sold 315,000 cars there this year and wants to increase that to 500,000 cars by 2018.