VW Builds Engine Factory in Kaluga, Russia

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is spending €250 million to build an engine factory in Kaluga, Russia, that will be completed in 2015. It will build VW's new EA211 engines.

When completed the factory will be able to produce 150,000 engines a year, and they will be transported to VW's auto factory in Kaluga. The Kaluga factory will build the 1.6-liter version of the engine that has not yet been introduced on any model. Volkswagen has an agreement with Russia that by 2016 30% of the cars it builds in Russia will use engines built in Russia. 

"Russia is the primary strategic growth market in Europe for the Volkswagen Group. By 2018 we intend to sell a half a million vehicles here annually. To this end we will once again be investing approximately €1 billion in local production and new models", said Chairman of the Board at VW Dr. Martin Winterkorn.

The EA211 engines are the 1.4-liter turbocharged engines with cylinder deactivation that VW is beginning to introduce. The family of engines can be built to displace between 1.0 liter and 1.6 liters. Among the first cars to get this engine is the Polo BlueGT. 

While VW has now invested over €1 billion in Russia, it sees the Russian market as growing and plans to invest another €1 billion in the coming years.