May 31, 2006

Volkswagen to build new plant in Russia

Wolfsburg, Germany – Volkswagen has signed the necessary contracts with the Russian Federation and the Kaluga Oblast in Moscow, clearing the way for a new plant in Kaluga, some 160 km southwest of Moscow. The company is looking at considerable growth opportunities in the Russian market; due to high customs duties on imported automobiles, Volkswagen and Skoda models can only be offered at competitive prices if produced in Russia.

During the run-in phase, semi-knocked-down Volkswagen and Skoda brand models will be assembled in Kaluga from the second half of 2007, starting with the Skoda Octavia. Initially, some 20,000 will be produced annually. During this time, full production facilities including a body shop, paint shop and assembly lines will be installed, with operation scheduled to commence in the first half of 2009.

The Skoda brand will continue to build the Octavia, while the Volkswagen brand will develop a Polo-based vehicle especially for the Russian market, expected to sell for less than 10,000 Euros. The new plant will employ up to 3,500 people and utilize production parts plants and suppliers in Russia; gearboxes and engines will be supplied by other Volkswagen Group plants.

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